Dollar steadies after sturdy U.S. bank results

© Reuters. FILE PHOTO: U.S. greenback banknotes are displayed on this illustration taken, February 14, 2022. REUTERS/Dado Ruvic/Illustration

By Joice Alves and Rocky Swift

LONDON/TOKYO (Reuters) – The U.S. greenback and euro steadied on Thursday after sturdy U.S. banking results firmed up expectations that the Federal Reserve and the European Central Monetary institution (ECB) will support elevating hobby rates.

Morgan Stanley (NYSE:) reported first quarter earnings on Wednesday that beat expectations, along with to rosy results from essential U.S. lenders and calming fears of a widening disaster after the failure of Silicon Valley Monetary institution and Signature Monetary institution (OTC:) and the emergency takeover of Credit Suisse by rival UBS.

The , which tracks the greenback in opposition to a basket of moderately about a essential currencies, eased 0.1% to 101.89 after sliding on Friday to its lowest level since early February.

The euro edged up 0.1% to $1.0964, now now not removed from a one-three hundred and sixty five days excessive touched final week in opposition to the greenback.

“The banking results continue to point that the U.S. bank funding state is stabilising,” said Monetary institution of Singapore currency strategist Sim Moh Siong. That has pushed away bets of hobby rates cuts, he said.

Comments from Fed and ECB policymakers furthermore supported the euro and the greenback.

Fed Monetary institution of Original York President John Williams said on Wednesday that inflation become gathered at problematic levels and the U.S. central bank would act to lower it.

The Fed will direct a closing 25-foundation-point hobby rate originate bigger in Also can merely after which support rates precise for the remainder of 2023, in line with economists in a Reuters ballot.

Within the euro zone, ECB policymaker Klaas Knot said inflation is gathered too excessive and a “sufficiently restrictive stance” is a significant.

The ECB is anticipated to steal rates for a seventh straight assembly on Also can merely 4, with policymakers converging on a 25-bp hike, even when a bigger pass is now now not but off the desk.

Traders are looking ahead to further cues on monetary protection from U.S. manufacturing knowledge on Friday, the Monetary institution of Japan’s assembly subsequent week, and the Fed’s Originate Market Committee (FOMC) early subsequent month, Monetary institution of Singapore’s Sim said.

HOT INFLATION

In other areas, the fell 0.4% to $0.6175 after touching its weakest level since March 16 on knowledge exhibiting Original Zealand’s individual label index (CPI) for the principle quarter came in below expectations, but remained come historical highs.

That adopted hotter than anticipated CPI figures in Britain that boosted bets for a rate originate bigger from the Monetary institution of England in Also can merely.

Sterling become flat at $1.2430, but now now not too removed from a 10-month excessive of $1.2545 touched on Friday.

The greenback rose 0.12% to $0.6722 after a overview of the Reserve Monetary institution of Australia (RBA) released on Thursday outlined a differ of reforms, along with a extra targeted monetary protection mandate.

The Eastern yen flattened to 134.64, after buying and selling above 135 to the greenback for the principle time in a month on Wednesday.