U.S. Dollar Falls After U.S. SVB Collapses

(RTTNews) - The U.S. dollar came under pressure against other major currencies in the Asian session on Monday, as traders remain cautious amidst the fallout of the biggest U.S. bank failure since the 2008 financial crisis. U.S. finance authorities announced plans to limit the fallout from the collapse of Silicon Valley Bank.

In a joint statement, the U.S. Treasury and Federal Reserve announced decisive actions to protect the U.S. economy by strengthening public confidence in the U.S. banking system.

The authorities also announced that Signature Bank, which had a lot of crypto exposure, would be closed due to systemic risks.

Meanwhile, data showing an increase in U.S. unemployment rate, and a drop in wage growth also raised concerns the U.S. Fed will continue to remain aggressive with regard to interest rate hikes this month.

The U.S. Labor Department reported on Friday that the non-farm payroll employment shot up by 311,000 jobs in February after spiking by a revised 504,000 jobs in January. Economists had expected employment to increase by 205,000 jobs compared to the surge of 517,000 jobs originally reported for the previous month.

Despite the stronger than expected job growth, the report said the unemployment rate rose to 3.6 percent in February from 3.4 percent in January. The unemployment rate was expected to be unchanged.

On Friday, the U.S. dollar was trading lower against its major counterparts.

In the Asian session today, the U.S. dollar fell to nearly a 4-week low of 1.0731 against the euro and nearly a 2-week low of 1.2139 against the pound, from last week's closing quotes of 1.0639 and 1.2029, respectively. If the greenback extends its downtrend, it is likely to find support around 1.09 against the euro and 1.23 against the pound.

The U.S. dollar retreated to 133.69 against the yen and 0.9155 against the Swiss franc from early highs of 135.05 and 0.9202, respectively. The U.S. dollar dropped to near 4-month low of 133.52 against the yen and 0.9146 against the Swiss franc in the early Asian session today. The greenback may find its support around 131.00 against the yen and 0.90 against the franc.

Against the Australian, the New Zealand and the Canadian dollars, the greenback dropped to 6-day lows of 0.6672, 0.6202 and 1.3711 from Friday's closing quotes of 0.6580, 0.6132 and 1.3823, respectively. The next support level for the greenback is seen around 0.69 against the aussie, 0.63 against the kiwi and 1.35 against the loonie. Looking ahead, U.S. consumer inflation expectations data for February is due to be released at 10:00 am ET.