The dollar and the euro
dollar
The dollar index fell 0.1% to 101.89
The dollar and the euro stabilized today, Thursday, after the strong results of US banks reinforced expectations that the Federal Reserve (the US central bank) and the European Central Bank will continue to raise interest rates.
Yesterday, Wednesday, Morgan Stanley announced first-quarter profits that exceeded expectations, boosting the strong results of major US banks and easing fears of a widening banking crisis after the collapse of Silicon Valley and Signature banks and the emergency takeover of its rival by UBS. Credit Suisse.
The dollar index, which tracks the greenback’s performance against a basket of other major currencies, fell 0.1% to 101.89, after it slid on Friday to its lowest level since early February.
The euro rose 0.1% to 1.0964 against the dollar, approaching the highest level in one year and touching it last week against the dollar.
“The banking results continue to show that the funding position of US banks is stable,” said Sim Moh Siong, a currency expert at Bank of Singapore. He stated that this led to the exclusion of bets on lower interest rates.
Statements from policymakers at the Federal Reserve and the European Central Bank also supported the euro and the dollar.
New York Fed President John Williams said on Wednesday that inflation remains at problematic levels and that the US central bank will work to bring it down.
Economists polled by Reuters expect the Fed to raise interest rates one last time by 25 basis points in May before locking them in for the rest of 2023.
In the eurozone, Claes Nott, a policymaker at the European Central Bank, said inflation was still too high and a “sufficiently mitigating stance” was needed.
The European Central Bank is expected to raise interest rates for the seventh consecutive meeting on May 4th, with policymakers agreeing to raise them by 25 basis points even if they have yet to agree on a bigger step.
Elsewhere in the world, the New Zealand dollar fell 0.4% to 0.6175 per dollar.
The British pound settled at 1.2430 against the dollar, approaching its highest level in 10 months at 1.2545 against the dollar, and touched it on Friday.
The Australian dollar rose 0.12% to 0.6722 against the dollar.
The Japanese yen settled at 134.64, after it traded above 135 against the dollar on Wednesday for the first time in a month.
