FOREX-Dollar higher as banking jitters resurface, euro slips

By Samuel Indyk

LONDON, April 25 (Reuters) – The dollar edged higher as risk sentiment soured in Europe on returning banking worries, while the euro slipped even as policymakers left the door open to a 50 basis point rate hike at next week’s European Central Bank meeting.

The U.S. dollar index was last up 0.2% at 101.48 in a flight to safety as worries about the health of the financial system resurfaced following earnings from First Republic Bank and UBS.

News on Monday of plunging deposits at First Republic Bank served as a reminder that stability risks have not entirely died down, while UBS reported a 52% slide in quarterly income as it prepares to swallow fallen rival Credit Suisse.

Safe haven currencies, such as Japan’s yen, also firmed on Tuesday, even as the Bank of Japan’s new governor Kazuo Ueda signalled he was not in a hurry to shift policy. This week’s BOJ meeting, which concludes on Friday, is…

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