EUR/USD: Euro Slips as European Banks Get Knocked

The EUR/USD pair was in for its worst day this year as Credit Suisse’s troubles took the euro down with it.

• The EUR/USD exchange rate dropped as much as 2.3% on Wednesday, or 254 pips, to hover near $1.05 – the pair’s lowest level for 2023. While the euro did pare back some of its losses, it closed out its worst session for the year, losing 1.44%, or 155 pips, against the stronger dollar.
• Behind the powerful move lower was a bank stocks selloff triggered by Credit Suisse. The Swiss-based lender lost a big-shot Saudi backer and short sellers piled into its stock, punishing it with a 27% drop before the Swiss central bank eased fears by saying it will help out with as much as $54bn in loans.
• Losses in the euro were further erased on Thursday but the pressure is still on, as European banks are hard at work to reel out of the dumpster fire caused by Credit Suisse facing the threat of bankruptcy or being acquired by a rival bank. The EUR/USD today pushed to a daily high around $1.0630.