Forex Today: Dollar and Yen jump as panic takes over markets

Here is what you need to know on Thursday, March 16:

Wall Street indexes finished far from the lows on a wild session that included moments of panic. The Nasdaq scratched a 0.05% gain while the Dow Jones lost 0.80%. Expectations of central bank tightening continue to ease, boosting government bonds. The banking crisis reached Europe, with focus on the health of Credit Suisse (CS). The DXY gained more than 1%, erasing weekly losses, boosted by the risk-off scenario. Emerging market currencies were under pressure. 

EUR/USD tumbled toward 1.0500 and then trimmed losses, still posting the worst day in months. On Thursday, the European Central Bank (ECB) meets. A 50 bps hike is still expected amid elevated inflation but the current turmoil put all options on the table. Central banks are now in a more difficult position. 

The Swiss Franc was among the worst performers, hit by the Credit Suisse drama. It even lost ground against the Euro. The Swiss National Bank (SNB) said it would provide liquidity to CS if necessary. USD/CHF jumped from near 0.9100 above 0.9300, while EUR/CHF rebounded from 0.9710 to 0.9850. 

GBP/USD did not escape Dollar’s strength, falling toward 1.2000. The Pound however, held relatively well with EUR/GBP reaching three months lows at 0.8715 before rebounding to 0.8770. 

USD/CAD soared, hitting levels above 1.3800 and then pulled back. NZD/USD fell modestly, losing 0.6200. New Zealand will report Q4 GDP on Thursday. AUD/USD gave up recent gains and is looking again at January lows (0.6580), although it climbed back above 0.6600 during the American afternoon. Australia will report February’s employment numbers. 

Gold jumped to $1,937/oz, a one-month high amid lower US yields, and then trimmed gains. Silver reached monthly highs above $22.00 and then pulled back to end flat around $21.70. 

Bitcoin held relatively well despite all the turmoil, with the price hovering around $24,000 after hitting on Tuesday $26,550, the highest level since June 2022. Ethereum dropped 5% to $1,630.