➡The U.S. dollar resumed its rise against major peers as traders paused for breath
➡The safe-haven yen and Swiss franc pulled back after their biggest rallies in almost seven weeks
➡The Reserve Bank of Australia held the key rate steady at a record low today
The ruble tried to regain some stability on Tuesday after its crash to an all-time low, while the U.S. dollar resumed its rise against major peers as traders paused for breath amid the fast-moving Ukraine crisis.
A modicum of calm has returned to currency markets since officials from Russia and Ukraine held an initial round of ceasefire talks overnight, four days after Russia invaded its neighbor, allowing some of the big moves from the start of the week to retrace after many positions were cleared out.
Who knows what happens next: Russia might become more aggressive, or they might agree on something, although what that could be is very difficult to predict. People are just watching the headlines, but we're at a point where unless there's some obvious negative news, the market is trying to stabilize a little.
Economic Calendar
The safe-haven yen and Swiss franc pulled back after their biggest rallies in almost seven weeks against the dollar on Monday. The greenback added 0.16% to 115.145 yen, after registering a 0.47% slide overnight. It rose 0.20% to 0.9185 franc, following Monday's 0.95% retreat. The euro resumed its decline, dropping 0.25% to $1.1191, but well off the low of $1.1121 from the previous session. The risk-sensitive Australian dollar slipped 0.15% to $0.72525 after earlier touching a nearly one-week high of $0.72670. The Reserve Bank of Australia held the key rate steady at a record low on Tuesday, as expected, noting that the Ukraine conflict added a new source of uncertainty to the outlook.
The instability will keep safe-haven currencies - including the dollar - bid, and the euro under pressure. The Ukraine crisis has seen traders pare bets for a 50 basis-point rate hike on March 16, with current odds at 11.4%. Atlanta Fed President Raphael Bostic said that he's not ruling out a half-point move.
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Euro
The single currency resumed its decline, dropping 0.25% to $1.1191, but well off the low of $1.1121 from the previous session. A modicum of calm has returned to currency markets since officials from Russia and Ukraine held an initial round of ceasefire talks overnight, four days after Russia invaded its neighbor. Overall, the EUR/USD traded with a low of 1.1140 and a high of 1.1245 before closing the day around 1.1216 in the New York session.
Yen
The Japanese Yen pulled back after its biggest rally in almost seven weeks against the dollar after Western nations ramped up sanctions against Russia over the weekend, including blocking some Russian banks from the SWIFT international payments system. Concerns about the Russia-Ukraine war have filtered to U.S. funding markets. Overall, the USD/JPY traded with a low of 114.84 and a high of 115.72 before closing the day around 114.98 in the U.S session.
Trading Forecasts
British Pound
The British Pound rose against the euro but was little changed against the dollar yesterday after Western nations imposed tough new sanctions on Russia for its invasion of Ukraine. Western allies acted over the weekend to block certain Russian banks’ access to the SWIFT international payments system. Overall, the GBP/USD traded with a low of 1.3326 and a high of 1.3430 before closing the day at 1.3416 in the New York session.
Canadian Dollar
The Canadian Dollar weakened against its US counterpart as the West imposed tougher sanctions against Russia over its Ukraine invasion and domestic data showed that the current account balance returned to a deficit in the fourth quarter. Canada posted a current account deficit of C$797 million in the fourth quarter. Overall, USD/CAD traded with a low of 1.2657 and a high of 1.2807 before closing the day at 1.2672 in the New York session.
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Australian Dollar
The Australian Dollar proving resilient today as high commodity prices and strength in domestic economies provided a buffer against geopolitical tensions. Australia as a net energy exporter is also set to gain from higher commodity prices, with liquefied natural gas and coal up sharply, while wheat, nickel, aluminum and iron ore were all firm. Overall, AUD/USD traded with a low of 0.7138 and a high of 0.7235 before closing the day at 0.7231 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 40 and lies below the neutral zone. In general, the pair has lost 0.96%.
Sterling-Yen
Currently, GBP/JPY is trading below 14, 50 and 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 42 reading and lies below the neutral zone. On the whole, the pair has lost 0.43%.
US Stock Markets
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 54 reading and lies above the neutral region. In general, the pair has lost 0.07%.
Euro-Sterling
This cross is currently trading above 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 46 and lies below the neutral region. Overall, the pair has lost 0.51%.
Sterling-Swiss
This cross is trading below 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 40 and lies below the neutral region. In general, the pair has lost 0.89%.
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