By Peter Nurse
Investing.com – The US dollar lost positions at the start of trading on Tuesday in Europe, as the recovery of confidence in the global banking sector weakened demand for this safe haven.
By 10:00 AM ET (10:00 AM ET), the , which tracks the currency against a basket of six other major currencies, was down 0.2% at 102.320.
The bank index rose 3.1% on Monday, helped by news that First Citizens BancShares will acquire the deposits and loans of Silicon Valley Bank, which failed earlier in the month, and also boosted by Bloomberg reports that US authorities are considering the possibility of providing more support to banks.
The reached a three-month high of 105.88 on March 8, before falling to 101.91 last week as risk sentiment fluctuated due to different bank headlines.
The turmoil in the banking sector has also shaken market expectations regarding a possible rise in interest rates for the , which now anticipates a pause in May.
For its part, the pair points to a rise of 0.2% to the level of 1.0817, and those responsible for the European Central Bank insist not only on the need to combat inflation, but also on the strength of the banks the region.
The has remained at healthy levels in March despite the recent turmoil in the banking sector, according to data published on Tuesday, after the unexpected increase in German business morale in March.
The pair is heading for a 0.3% rise to the 1.2321 level, maintaining its recent strength after the Governor of the Bank of England said on Monday that inflation remained the main driver of monetary policy decisions.
The data, published this Tuesday, show that the general inflation of prices in shops has risen to 8.9% in March compared to 8.4% in February, the largest increase since their records began in 2005.
The very risk sensitive pair is up 0.6% to 0.6689, and the is down 0.5% to 130.92. The yen benefited from the consolidation of Japanese corporate earnings abroad ahead of the close of the Japanese fiscal year on Friday.
The pair is down 0.1% to the 6.8816 level, and attention is focused on the Chinese data release later this week, which will provide clues as to the state of the country’s economic recovery.