The US dollar fell against a basket of currencies for a second day in a row on Tuesday as concerns about an easing banking crisis revived investor appetite for riskier currencies.
The banking panic began to calm following First Citizens BancShares' agreement to buy all of Silicon Valley Bank's deposits and loans. Furthermore, this week no more sentiments about the banking crisis appeared.
The US dollar index, which measures the US dollar against six major currencies, was 0.18% lower near a near seven-week low of 101.91 touched on Thursday.
The Australian dollar, seen as a liquid proxy for risk appetite, was 0.39% higher trading at $0.6677, boosted by better-than-expected retail sales data.
"There is definitely a positive bias to trading today," said TraderX strategist Michael Brown in London.
The euro rose to a five-day high against the US dollar as eurozone government bond yields rose on Tuesday.
The US dollar got some support from data on Tuesday that showed the US trade deficit in goods grew modestly in February as exports slumped.
The yen strengthened even as the market generally considered it a safe haven with analysts pointing to increased trends ahead of the end of Japan's fiscal year on Friday. Analysts say Japanese companies are likely to sell foreign bonds to shore up their balance sheets.
Brown analysts warned that the recent dollar sell-off may have been overdone with the US dollar already down more than 3% from March highs against a basket of currencies.
