Singapore, March 30 (BNA): The US dollar rose slightly on Thursday as easing concerns about the banking sector boosted risk sentiment and shifted investor attention to the Federal Reserve’s fight against inflation.
The dollar index, which tracks the currency against six major peers, rose 0.019% to 102.65, after rising 0.19% overnight. However, the index was on track to post a 2% decline for the month of March due to market turmoil over the banking industry’s woes.
“The broader risk sentiment seems sustainable as concerns about bank contagion continue to fade, and a rally in Chinese stocks is attracting some interest,” said Christopher Wong, currency analyst at OCBC in Singapore.
Asian stocks got a boost from Alibaba this week after the tech giant announced plans on Tuesday to split into six units, which investors took as a signal that Beijing’s regulatory crackdown on the companies was over.
“While risk sentiment continued to be somewhat elevated this week, we expect month-end flows combined with risk-off and risk-off flows to push the trade in two directions,” Wong said.
Bank stocks have taken a hit in the past few weeks in the wake of the sudden collapse of US lenders and the Credit Suisse bailout, with the dollar under pressure from the prospect that the Federal Reserve will be forced to back down in its fight against inflation and halt interest rates. walking long distances.
But with no other indications of cracks in the financial sector and after the steps taken by regulators, investor nerves have calmed for the time being. Their focus has turned again to what the Fed is likely to do at its next meeting in May.
Markets are pricing in a 60% chance that the Fed will stand on interest rates, according to CME FedWatch, as investors anticipate year-end rate cuts.
Data on personal consumption expenditures due on Friday will provide further clues to inflationary pressures.
“With recession fears fading, market focus now turns to upcoming US PCE data later this week, which is seen as the Fed’s favorite inflation indicator,” said Tina Ting, analyst at CMC Markets.
The euro fell 0.04% to $1.0839, but was on track to end the month with a gain of 2%. The pound settled at $1.2311, after falling 0.2 percent on Wednesday.
The Japanese yen rose 0.23% to 132.57 against the dollar, after falling 1.5% overnight. The currency was volatile in the run-up to the end of the Japanese fiscal year on Friday.
The Australian dollar rose 0.06% to $0.669, while the New Zealand dollar fell 0.10% to $0.622.
HF