- The U.S. dollar jumped to its highest level in nearly two years in yesterday’s trading session
- Russian forces invaded Ukraine in an assault by land, sea and air
- U.S markets were in the throes of the first wave of the COVID-19 pandemic
The U.S. dollar jumped to its highest level in nearly two years and the Russian rouble plunged to a record low on Thursday after Russia launched an invasion of Ukraine, as investors fled risk assets and moved toward safe-haven assets.
Russian forces invaded Ukraine in an assault by land, sea, and air, in the biggest attack on a European country since World War Two. The dollar index rose 0.869% and was on pace for its biggest daily percentage gain since March 2020, when the U.S, markets were in the throes of the first wave of the COVID-19 pandemic.
The greenback reached a high of 97.740 against a basket of major currencies, its highest since June 30, 2020. The dollar weakened slightly as U.S President Joe Biden announced new sanctions against Russia, including banks. We have a big geopolitical development that a lot of people haven’t seen before in their lives; it’s a classic risk-off move.
Economic Calendar
There is a push and pull over which currency is the biggest safe haven at the moment. Against other safe-havens, the dollar rose 0.77% against the Swiss franc while the Japanese yen weakened 0.54% versus the greenback at 115.61 per dollar. The greenback has been subdued recently as tensions in Ukraine have increased and fueled speculation the U.S. Federal Reserve may be less aggressive in tightening policy at its March meeting.
Expectations for at least a 50-basis-point interest rate hike have dropped to 7.5% from around 34% a day ago. Fed policymakers on Thursday acknowledged the central bank's tightening plans were now jousting with the possibility of war and its impact on oil prices. The Australian and New Zealand dollars were holding their ground today as the Russian invasion of Ukraine caused major mood swings in markets, but also boosted prices for resources Australia is rich in.
Wall Street is gauging the further effect of the conflict between Russia and Ukraine on asset prices
Euro
The single currency was down 0.95% as the U.S dollar jumped to its highest level in nearly two years and the Russian rouble plunged to a record low yesterday after Russia launched an invasion of Ukraine, as investors fled risk assets and moved toward safe-haven assets. Russian forces invaded Ukraine in an assault by land, sea, and air. Overall, the EUR/USD traded with a low of 1.1105 and a high of 1.1309 before closing the day around 1.1190 in the New York session.
Yen
The Japanese Yen is likely to continue to face headwinds as Japan’s central bank maintains a more dovish stance than peers, even after the currency briefly hit three-week highs on Thursday on safe-haven buying. The Bank of Japan is more dovish than peers as the country faces more modest growth and inflation, while the U.S Fed is expected to aggressively hike rates. Overall, the USD/JPY traded with a low of 114.38 and a high of 115.67 before closing the day around 115.51 in the U.S session.
British Pound
The British Pound fell against the dollar but stood its ground versus the euro as investors rushed into safe-haven assets after Russia launched an all-out invasion of Ukraine by land, air, and sea. Ukraine’s President said Kremlin leader Vladimir Putin’s aim was to destroy his state, while U.S President and other leaders promised tough new sanctions in response. Overall, the GBP/USD traded with a low of 1.3270 and a high of 1.3547 before closing the day at 1.3375 in the New York session.
Markets seemed to take cheer from news of talks between the U.S. and Russia about Ukraine
Canadian Dollar
The Canadian Dollar weakened to its lowest level since December against its U.S counterpart yesterday as Russia's invasion of Ukraine triggered a flight to safety in global financial markets. The price of oil, one of Canada's major exports, climbed 7.60% to $99.10 a barrel as the invasion added to concerns about disruptions to the global energy supply. Overall, USD/CAD traded with a low of 1.2725 and a high of 1.2875 before closing the day at 1.2812 in the New York session.
Australian Dollar
The Australian Dollar holding its ground today as the Russian invasion of Ukraine caused major mood swings in markets, but also boosted prices for resources Australia is rich in. The Aussie has been indirectly supported this week by bumper dividend payments from miners which are converted from U.S. dollars to Aussie. Overall, AUD/USD traded with a low of 0.7169 and a high of 0.7228 before closing the day at 0.7171 in the New York session.
Euro-Yen
EUR/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also issuing a bearish stance. The Relative Strength Index is above 41 and lies below the neutral zone. In general, the pair has lost 0.54%.
The dollar bounced on Thursday after a Russian news report of mortar fire in eastern Ukraine
Sterling-Yen
Currently, GBP/JPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 45 reading and lies below the neutral zone. On the whole, the pair has lost 0.80%.
Aussie-Yen
Currently, the cross is trading above 14, 50 and below 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 43 reading and lies below the neutral region. In general, the pair has lost 0.54%.
Euro-Sterling
This cross is currently trading below 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 44 and lies above the neutral region. Overall, the pair has gained 0.25%.
Sterling-Swiss
This cross is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 46 and lies above the neutral region. In general, the pair has lost 0.42%.
Investors are lost in the fog of war and that’s why we are seeing this volatility
###
All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner's prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.
No comments:
Post a Comment