Currency markets showed some cautious optimism after global authorities moved to stem contagion from a simmering banking crisis, with the safe haven dollar on the back foot and the yen tumbling amid a rebound in Treasury yields.
The risk-sensitive Australian dollar jumped to a two-week high, while the euro edged higher for a third straight day.
Over the weekend, the Federal Reserve, European Central Bank, Bank of England, Swiss National Bank, Bank of Canada and Bank of Japan announced joint action to enhance market liquidity. That followed Swiss authorities' negotiation of a buyout of Credit Suisse by UBS, but at a huge discount and with massive debt writedowns.
The currency market's "initial response has been a 'risk positive' one," Ray Attrill, head of foreign-exchange strategy at National Australia Bank wrote in a note to clients, pointing to the yen's slide and Aussie's rebound in particular.
The yen dived 0.6% to 132.59 per dollar as 10-year Treasury yields jumped 12 basis points to 3.52% to start the week, pulling away from the low of 3.369% from Thursday.
Japan's currency had gained 2.5% last week.
