The conflict and subsequent Western sanctions have crushed Russian assets

• The euro was pinned near a 22-month low as the war in Ukraine darkens Europe's economic outlook
• Sterling roared to 5-1/2 year high versus the euro but dropped to its weakest since 2020 against the dollar
• European currencies have been falling fast since Russia invaded Ukraine
• Investors have pared back their expectations for policy tightening from the Bank of England

Forex market

The euro was pinned near a 22-month low today as the war in Ukraine darkens Europe's economic outlook, while commodity currencies took a breather in their weeks-long rally. The euro attempted a bounce in Asia, after six straight sessions of selling, but at $1.0859, it was not carried terribly far from yesterday's trough of $1.0806. 

The common currency is down 4% on the dollar since Russia launched what it calls a "special military operation" in Ukraine where fighting is showing no signs of abating. It flirted with parity on the Swiss franc yesterday for the first time in seven years and traders are bracing for a bumpy ride ahead, with euro/dollar volatility gauges at their highest since the market chaos of March 2020. 

Economic Calendar

Russia-Ukraine Peace talks have made scant progress and though Germany's opposition to a ban on Russian energy imports knocked oil futures from Monday's 14-year peak, analysts expect the supply shock to persist and hurt growth. Barring a clear improvement in the geopolitical conflict, the playbook for the pair should be to sell on rallies. In this case, expect selling pressure to pick up above 1.0900. A further downside cannot be ruled out, with the European Central Bank (ECB) decision on Thursday unlikely to provide sustained relief.

The ECB meets on Thursday with the specter of stagflation prompting economists to figure that policymakers might delay rate hikes until late in the year. Sterling, which had been battered along with the euro was also parked near the 16-month low it struck yesterday, last buying $1.3121. The yen dipped slightly to 115.44 per dollar with surging oil import costs pushing Japan to its biggest current account deficit since 2014 January. 

CFD News: US Stock Markets

Besides commodities' parabolic rally, the conflict and subsequent Western sanctions have crushed Russian assets, with the ruble sliding to a record low of 160 to the dollar in erratic offshore trade yesterday. Commodities and exporters' currencies paused for breath today.

Euro

The single currency was pinned near a 22-month low today as war in Ukraine darkens Europe's economic outlook, while commodity currencies took a breather in their weeks-long rally. The common currency is down 4% on the dollar since Russia launched what it calls a "special military operation" in Ukraine where fighting is showing no signs of abating. Overall, the EUR/USD traded with a low of 1.0884 and a high of 1.0665 before closing the day around 1.0934 in the New York session.

Yen

The Japanese Yen reversed almost all of its earlier gains. Japan recorded its largest current account deficit since the start of 2014 in January as a jump in oil import costs offset gains in investment income, with continuing uncertainty due to the Ukraine crisis and COVID-19 pandemic. Japan posted a current account deficit of 1.1887 trillion yen. Overall, the USD/JPY traded with a low of 114.63 and a high of 115.53 before closing the day around 114.83 in the U.S session.

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British Pound

The British Pound roared to another 5-1/2 year high versus the euro but dropped to its weakest since December 2020 against the dollar, as another volatile session sent investors to buy dollars. European currencies have been falling fast since Russia invaded Ukraine as investors worry about the impact on their economies of the war. Overall, the GBP/USD traded with a low of 1.3200 and a high of 1.3353 before closing the day at 1.3238 in the New York session.

Canadian Dollar

The Canadian Dollar drifted aimlessly despite soaring oil prices and renewed risk-aversion trading in other G-10 currencies. The U.S is considering a bipartisan bill to ban imports of Russian oil and there is talk that the rest of the Western nations including the European Union may follow suit. Politicians are outraged by reports the Russian military is targeting civilians. Overall, USD/CAD traded with a low of 1.2667 and a high of 1.2789 before closing the day at 1.2735 in the New York session.

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Australian Dollar

The Australian Dollar edging higher again today as wild swings in oil prices made for erratic markets and analysts revised up expectations for rate hikes at home. While the Antipodeans were still drawing support from sky-high commodity prices, these also act as a tax on consumers and a brake on world growth that might not be positive for risk-sensitive currencies in the longer run. 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 1.70%.

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 1.35%.

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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 gained 0.06%.

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 0.35%.

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 0.86%.

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