Fri, April 19, 2024

Euro gives back gains

The Euro at Its Lowest Since 2020 (EUR/USD)

The euro advanced slightly, with small gains after the European Central Bank took steps to raise interest rates. However, the rate path in the coming period would depend on incoming statistics.

The ECB had been increasing rates rapidly to tackle high inflation. However, the sudden failure of the Silicon Valley Bank in the US has destabilized global markets, potentially halting the ECB’s plans.

The euro was down 0.26% after the ECB decision, having traded around 0.2% higher before the decision. On Wednesday, the bank’s shares fell by 30%.

The Swiss franc saw a boost in stability, causing the dollar to decrease more than 1% to 0.9233, reversing the 2.16% increase it had seen the day before – the largest daily surge since as far back as 2015.

The Japanese yen, viewed as a haven, continued to be popular while worldwide markets improved slightly.

The dollar was last down 1.18% against the yen at 131.93, down about 4% from a nearly three-month high the US currency hit on March 8.

Sterling was flat at $1.2048, while the dollar index, which tracks the unit against six major peers, retreated 0.1% to 104.6.

Banking fears spread to Europe

After yesterday’s statistics, financial markets are losing their successful spin on quality today. The transfer of banking fears from the US to Europe has led to a large-scale spread of risky assets.

The Swiss National Bank of the banking group Credit Suisse helped today’s risk level in the market by using 50 billion Swiss francs to strengthen its balance sheet. The CDS market was valued at almost 50% of Credit Suisse’s default. Today’s market is very stable, and the US Dollar has weakened, allowing the range of US Dollar pairs to advance.

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