Dollar falls as US gets involved in Silicon Valley bank collapse

The dollar index, which compares the US currency against its six peers, fell 0.153%.


The U.S. dollar fell on Monday as authorities moved to cover the fallout from the sudden collapse of a Silicon Valley bank, with investors hoping the Federal Reserve will take a less aggressive monetary path.

The US government announced several measures during Asian hours on Monday and said that all SVB customers will be able to access their deposits from Monday. Officials also said depositors at Signature Bank of New York, which was shut down on Sunday by New York state’s financial regulator, will not be harmed by the taxpayer.

The dollar index, which measures the U.S. currency against six peers, was down 0.153% at 104.080. The Japanese yen gained 0.34% to 134.52 per dollar, its highest in a month, as investors moved to safer Asian currencies.

“The currency market is still digesting all the news surrounding the collapse of SVB,” said Carol Kong, currency strategist at Commonwealth Bank of Australia.

“Given all the measures taken by the authorities, the market should be calm at least for now, but if there are concerns about regional banks, we could easily see the dollar and Japanese yen rise again.”

The euro was up 0.44% at $1.069, while sterling was last trading at $1.2085, up 0.47% on the day.

The Australian dollar rose 0.79% to $0.663, while the kiwi rose 0.36% to $0.616.

In cryptocurrencies, Bitcoin was last up 11.12% at $22,330.00. Ethereum was last up 12.12% at $1,598.90.

The SVB decline led investors to speculate that the Fed would be reluctant to rock the boat by raising interest rates by 50 basis points this month, a focus on Tuesday’s inflation data.

“From the FOMC’s point of view, their concern is still inflation and inflation hasn’t really slowed down,” Kong said, adding that tomorrow’s CPI will continue to show that inflation will remain persistently high.

“Given the state of the US financial system, a 25 basis point hike is much more likely than a 50 basis point hike.”

Fed fund futures rose in early trade, giving only a 17% chance of a half-point rise, compared with about 70% before the SVB news broke last week.

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Currency rates at 0046 GMT

Description RIC Last US Close Pct Change YTD Pct High Price Low Price

Previous change


EUR/USD $1.0690 $1.0639 0.49% -0.22% 1.0704 1.0648

Dollar/Yen 134.4550 134.9200 -0.47% 2.33% 135.0050 134.2000

Euro/Yen 143.76 143.70 0.04% 2.47% 144.2100 143.1100

Dollar/Swiss 0.9183 0.9216 -0.36% -0.69% 0.9201 0.9152

Sterling/Dollar 1.2086 1.2036 0.45% -0.03% 1.2099 1.2040

Dollar/Canadian 1.3758 1.3827 -0.49% 1.55% 1.3823 1.3759

Aussie/Dollar 0.6623 0.6582 0.65% -2.82% 0.6646 0.6587

NZ 0.6154 0.6135 0.31% -3.08% 0.6172 0.6140


All points

Tokyo points

European points


Tokyo Forex Market Information BOJ

(Except for the headline, this story was not edited by NDTV staff and was published on a syndicated channel.)

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