LONDON, March 15 Reuters European currencies fell sharply on Wednesday after Credit Suisse39;s tumble to a new low renewed worries about the European banking sector following Silicon Valley Bank SVB39;s collapse.

The euro, sterling and the Swiss franc saw sharp declines against the U.S. dollar as Credit Suisse shares plummeted around 30 after its biggest investor said it could not provide any more backing.

Concerns around the Swiss lender led the wider European banking index to its lowest since early January and triggered a sharp selloff in the currency market.

Earlier in the day, most major currencies had traded steadily against the dollar, as some of the investor concerns about contagion in the U.S. banking system had subsided following the failure of SVB last week.

At 1305 GMT, the euro was down 1.75 to 1.0574 and set for its biggest daily drop since March 2020.

The Swiss franc , which had gained around 3 in one week thanks to safehaven demand, slid 0.8 to 0.9218 per dollar.

Sterling dropped 0.7 to 1.2077, with Finance minister Jeremy Hunt39;s budget speech to parliament doing little to support the currency against the dollar. Against the euro , the pound was up 1.2.

Britain39;s economy is forecast to contract by 0.2 in 2023, but it is no longer forecast to enter a recession this year, Hunt said, citing the latest projections from the Office for Budget Responsibility OBR.

The new figure for 2023 compared with a forecast for a contraction of 1.4 in the OBR39;s…