Dollar edges up, sterling hovers near one-year high

The dollar inched higher on Tuesday after a loans survey revealed that credit conditions in the United States were less gloomy than expected, while the pound flirted with a one-year peak ahead of this week’s Bank of England policy meeting.

The Federal Reserve’s quarterly Senior Loan Officer Opinion Survey (SLOOS) showed that while credit conditions for U.S. business and households continued tightening at the start of the year, it was likely due to the impact of the Fed’s aggressive rate hikes rather than severe banking sector stress.

The closely-watched survey released on Monday was among the first measures of sentiment across the banking sector since the recent run of bank failures, sparked by Silicon Valley Bank’s collapse in March, had spread turmoil in global markets.

The U.S. dollar rode Treasury yields modestly higher after the survey, as traders pared back their expectations on the scale of Fed rate cuts needed later this year to ease the stress on the sector.

The euro was last 0.16% lower at $1.0987, while the Japanese yen slipped 0.1% to 135.24 per dollar.

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