The dollar was steady on Monday, while the yen hovered near its seven-week peak on Monday as investors assessed moves made by authorities and regulators to deal with concerns over the global banking system.
The dollar index, which measures the currency against six rivals, rose 0.078 per cent at 103.07, having gained 0.5 per cent on Friday amid banking jitters, with shares of Deutsche Bank falling nearly 9 per cent.
After the collapse of two U.S. banks and the rescue of Swiss bank Credit Suisse last week, global banking stocks have been battered through the month, with authorities stepping in to help investors' nerves.
According to Marc Chandler, chief market strategist at Bannockburn Global Forex, Pragmatic action by central banks, governments and the private sector has not been enough to allow investors to be confident that the problem is ring-fenced.
The Federal Deposit Insurance Corporation said First Citizens BancShares Inc would acquire all of Silicon Valley Bank's deposits and loans from the regulator on Monday.
The U.S. Financial Stability Oversight Council said on Friday that the U.S. banking system was sound and resilient despite stress on some institutions. The investors are cautious.
The currency gained 4 per cent in March after investors sent the yen to a seven week high of 129.65 per dollar on Friday. It was last at 130.75 on Monday.
The Fed on Wednesday raised interest rates by 25 basis points, but took a cautious stance on the outlook because of the banking sector turmoil, even as Fed Chair Jerome Powell kept the door open on further rate rises if necessary.
Markets are pricing in a more than 80 per cent chance of the Fed's standing pat on interest rates in its next meeting in May and anticipate a rate cut as early as July, according to CME FedWatch.
Chandler said that the Fed funds futures are pricing in dramatic easing in the coming months, contrary to the clear signal from Powell. This is extremely aggressive and stretches the imagination. The recent stress in the banking sector and the possibility of a follow-on credit crunch has brought the U.S. closer to recession, according to Minneapolis Fed president Neel Kashkari.
What's not clear how much of these banking stresses are leading to a widespread credit crunch, that's for sure. Kashkari said in comments to CBS show Face the Nation that the credit crunch would slow down the economy. We are monitoring this very closely. The euro was up 0.05 per cent to $1.0764 after falling 0.6 per cent on Friday. The pound was at $1.2235, up 0.05 per cent on the day, having slid 0.5 per cent on Friday.
The Australian dollar was up 0.09 per cent to $0.665. The kiwi was up 0.03 per cent at $0.620.
In cryptocurrencies, the price of digital currency rose 0.84 per cent to $27,861. The price of ether went up 0.71 per cent to $1,763.