Dollar slides on likely rate pause in wake of SVB collapse
The dollar fell sharply on Monday on heightened expectations the Federal Reserve will take a less aggressive monetary path as authorities stepped in to limit the fallout from the sudden collapse of Silicon Valley Bank (SIVB.O).
The U.S. government announced several measures early during the Asian trading day, saying all SVB customers will have access to their deposits starting on Monday.
The authorities also said depositors of New York’s Signature Bank (SBNY.O), which was closed Sunday by the New York state financial regulator, would be made whole at no loss to the taxpayer.
The Fed announced it would make additional funding available through a new Bank Term Funding Program, which would offer loans up to one year to depository institutions, backed by Treasuries and other assets these institutions hold.
The market turmoil from the SVB collapse led investors to speculate the Fed will no longer raise interest rates by a super-sized 50 basis points this month. Investor focus will now be on Tuesday’s inflation data to gauge how hawkish the Fed is likely to be.
This report’s information was first seen on REUTERS; to read more, click this link.