Sterling rose in European trade, leading positive currencies this week away from six-week lows against yen amid improving risk appetite in the markets. 

Banking concerns calmed down as authorities continue to support the banking sector, while Deutsche Bank's stock rebounds strongly. 

Investors now await an important speech by Bank of England Andrew Bailey in London, expected to include clues on the future developments of the UK monetary policies. 

GBP/JPY rose 1.1% to 161.42, with a session-low at 159.59, after losing 0.6% on Friday against yen, plumbing six-week lows at 158.26. 

Improving Sentiment 

Most stock markets in Asia and Europe rebounded as risk sentiment improved markedly with concerns about the banking sector subsiding. 

In the US, authorities continue to take measures to underpin the US banking sector and restore confidence. 

US authorities believe the banking sector is strong and flexible despite ongoing pressure on some institutions. 

Authorities also study an emergency lending program to banks to support struggling banks like First Republic. 

Already, the First Citizens BankShares agreed to purchase Silicon Valley Bank in a deal valued at $16.5 billion that carries all of the bank's deposits and loans. 

In Europe, ECB President Christine Lagarde told EU leaders the banking system remains strong. 

Deutsche Bank rose over 7% on Monday after a 9% drop on Friday to five-month lows as costs for insuring the German bank's loans surged. 

Gold prices fell in European trade for another session away from the psychological level of $2,000 as haven demand slows down. 

Authorities continue to take necessary measures to curb concerns about the banking sector and protect its foundations, following the collapse of the US Silicon Valley Bank.

Gold prices were overall underpinned by prospects of a potential rate cut in the US in the next half of the year. 

Gold Prices

Gold prices fell 0.65% to $1,965 an ounce, with a session-high at $1,979, after losing 0.8% on Friday, the first loss in three days as haven demand slowed down. 

Gold prices lost 0.55% last week, the first weekly loss in a month on profit-taking off one-year high at $2,009.

Banking Fears Subside 

In the US, authorities continue to take measures to underpin the US banking sector and restore confidence. 

US authorities believe the banking sector is strong and flexible despite ongoing pressure on some institutions. 

Authorities also study an emergency lending program to banks to support struggling banks like First Republic. 

Already, the First Citizens BankShares agreed to purchase Silicon Valley Bank in a deal valued at $16.5 billion that carries all of the bank's deposits and loans. 

In Europe, ECB President Christine Lagarde told EU leaders the banking system remains strong. 

Deutsche Bank rose over 7% on Monday after a 9% drop on Friday to five-month lows as costs for insuring the German bank's loans surged. 

Fed Remarks

Minneapolis Fed President Neil Kashkari said the recent pressures on the banking sector and the potential for a credit crisis later made the US closer to recession. 

Fed Rates

Pricing for no change in US interest rates at the May 3 Fed meeting stand at 80%, while pricing for 0.25% rate hike stands at 20%. 

The SPDR

Gold holdings at the SPDR Gold Trust fell 1.45 tones on Friday to a total of 923.97 tones, off a total of 925.42 tones, the highest since October 2022. 

Gold prices declined on Friday as the dollar rallied against most major rivals while markets assess the ongoing banking crisis and the Federal Reserve's policies. 

Stubborn Banking Troubles

Concerns about the banking sector magnified again after a sudden increase the costs of insuring Deutsche Bank's debts.

Banking stocks in Europe fell in unison today in European markets, triggering concerns about a continuation of the crisis.

Deutsche Bank's New York Exchange listed stock fell 6.75% to $9, while falling over 9% in the Frankfurt Exchange.

Data

US durable goods orders fell 1% in February for the second month, missing estimates of a 0.4% increase.

Core orders, excluding transportation, were flat, missing estimates of a 0.2% increase.

The US manufacturing PMI rose to 49.3 this month from 47.3 in February, beating expectations of 47.

The services PMI rose to 53.8 this month from 50.6 in the previous reading.

The Fed 

The Federal Reserve raised interest rates by 25 basis points to 5%, the highest since mid 2007.

The Fed removed the phrasing about the need for continuous hikes in interest rates, preferring to use the phrase of "some more tightening" could be appropriate.

The Fed also maintained neutral interest rates outlook at 5.25% for 2023, paving the way for one more rate hike this year.

Fed Chair Jerome Powell said the Fed will do whats "necessary" to bring inflation back to 2%, with another rate hike if needed.

Powell said US growth was impacted by higher interest rates, while the labor sector remains strong, and unemployment low.

He asserted the Fed is working with the US Treasury Department to scan the banking system and guarantee its strength and protect deposits.

And finally he said that it's unlikely for the Fed to cut interest rates this year, and a rate increase is possible.

Otherwise, the dollar index rose 0.6% as of 18:39 GMT to 103.1, with a session-high at 103.3, and a low at 102.5. 

Gold spot prices fell 0.8% as of 18:39 GMT, or $16.30 to $1,979 an ounce, while marking a 0.5% profit this week. 

‏US stock indices declined on Friday amid renewed concerns about the banking system crisis and its impact on global economy. 

Deutsche Bank Rears its Head

Concerns about the banking sector magnified again after a sudden increase the costs of insuring Deutsche Bank's debts.

Banking stocks in Europe fell in unison today in European markets, triggering concerns about a continuation of the crisis. 

Deutsche Bank's New York Exchange listed stock fell 6.75% to $9, while falling over 9% in the Frankfurt Exchange. 

Data

US durable goods orders fell 1% in February for the second month, missing estimates of a 0.4% increase.

Core orders, excluding transportation, were flat, missing estimates of a 0.2% increase.

The US manufacturing PMI rose to 49.3 this month from 47.3 in February, beating expectations of 47. 

The services PMI rose to 53.8 this month from 50.6 in the previous reading. 

On trading, Dow Jones fell 0.7%, or 215 points to 31,889, while S&P 5900 declined 0.7%, or 28 points to 3,920, as NASDAQ shed 0.9%, or 107 points to 11,680.