Fed decision this week.

The University of Michigan consumer confidence index retreated to 63.4 for March from 67.0 the previous month and below consensus forecasts of 67.0. The current conditions component retreated to 66.4 from 70.7 and the expectations component also retreated to 61.5 from 64.7.

The 1-year inflation expectations index retreated to 3.8% from 4.1% while the 5-year expectations edged lower to 2.8% from 2.9%.

Wall Street equities moved lower and there were renewed gains for Treasuries with yields sliding lower. The 2-year yield dipped back below the 4.00% level while the 10-year yield declined to 3.40%.

Just ahead of Monday’s Asian open, the Swiss authorities announced that UBS had taken over Credit Suisse to rescue the bank and lessen the risk of contagion.

Over the weekend, major central banks also announced that they would boost dollar liquidity in global markets to help ease funding tensions.

The Credit Suisse rescue and move to boost dollar liquidity was significant in boosting risk appetite at the Asian market open on Monday, but overall fragile remained very fragile with equities unable to sustain gains.

Overall confidence in the financial sector remained extremely fragile with renewed losses in early Europe.

Fragile risk sentiment continued to drive demand for gold which posted 11-month highs close to the $2,000 level amid a fresh increase in defensive demand.

Bitcoin also posted 9-month highs amid reservations surrounding fiat currencies.

The Federal Reserve will announce its latest policy decision on Wednesday. Fed futures remain volatile with markets now pricing in around a 50% chance of a further 25 basis-point rate hike to 5.00% compared with a 70% chance on Friday.

Markets will remain on alert for policy leaks through the Wall Street Journal.

The Euro found support on dips on Friday with support on approach to 1.0600. The dollar was undermined by fresh concerns surrounding the US banking sector. ECB officials maintained a generally hawkish policy stance with EUR/USD moving back above 1.0650. The UBS move to buy Credit Suisse helped underpin the Euro. Overall risk appetite remained fragile with EUR/USD unable to hold above 1.0700 and close to 1.0650 on Monday.

Lower US yields supported the Japanese currency.  USD/JPY dipped sharply to below 132.00 and lows near 131.50. USD/JPY gains to 132.60 were also faded aggressively and hit lows below 131.00 on Monday in very volatile trading.

The Swiss franc lost some ground when risk appetite recovered and overall franc confidence was undermined by the Credit Suisse affair. EUR/CHF rallied back above the 0.9900 level before settling around 0.9885 with USD/CHF around 0.9260.

Sterling was again broadly resilient on Friday and rallied on the Credit Suisse news. GBP/USD found support at 1.2100 and rallied to 1.2180 on Monday, but failed to hold above 1.2200.

Commodity currencies surrendered gains on Friday as equities moved lower. Gains on the Credit Suisse news were also faded as equities posted fresh losses. AUD/USD hit selling above 0.6700 and settled around 0.6685. USD/CAD found support below 1.3700 and consolidated around 1.3725.