Last week's financial landscape was far from clear-cut. While it wasn't a definitive risk-on market, investors seemed reluctant to abandon US shares completely. The markets found themselves mired in confusion, struggling to make sense of the relentless barrage of headlines detailing bank crises that began with Silicon Valley Bank, then spread to First Republic, Credit Suisse, and eventually Deutsche Bank. Amid the banking turmoil, rate hikes by Fed, BoE, and SNB added another layer of complexity, prompting reinterpretations of rate outlooks and their influence on financial markets. Despite the chaos, Yen emerged as the strongest performer for yet another week. Euro and Swiss Franc trailed behind, both making a notable recovery from the previous week's losses. Were it not for Deutsche Bank's woes, Euro might have claimed the top spot. Commodity currencies bore the brunt of the market turbulence, while Dollar and Sterling delivered mixed results. As uncertainties continue to mount, including potentially more bank troubles, rate outlooks, and recession risks, the fluctuations between Dollar and European majors may persist until clarity is restored. For the time being, however, Yen appears to be in prime position to extend its gains against commodity currencies. |
