Turbulent Market Due to SVB Crisis, What Happened to the USD?


 The opening of trading earlier in the week saw the US dollar slip lower as markets cut expectations that the Federal Reserve (Fed) would act aggressively amid the Silicon Valley Bank (SVB) crisis.

The US government announced some early steps on Monday, saying all SVB customers will have access to their deposits starting today.

In addition, depositors of New York's Signature Bank, which was closed by the New York state financial regulator, will also be paid in full with no loss to taxpayers.

At the same time, the Fed announced an emergency lending facility by providing additional funding to eligible banks to ensure they have the ability to meet the needs of all depositors.

The SVB's fall has fueled expectations that the Fed may delay its intention to raise rates by 50 basis points at this month's meeting.

This was supported by a mixed reading in the US NFP employment data, where employment growth was seen to slow in February despite being better than expected.

The US economy added 311,000 jobs last month, down from the 504,000 posted in January, but beating expectations for a 224,000 increase.

Meanwhile, the unemployment rate surprised the market by recording an increase to 3.6% from 3.4% previously.

The streak, the US dollar opened lower in the Asian session today which saw the dollar index traded around the price of 104.30 against a group of major currencies.

Meanwhile, the euro and pound traded stronger by taking advantage of the weakening of the US dollar.

Even so, the market remains cautious about the SVB issue and ahead of some key data releases this week, especially the US inflation report.