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Thursday 17 February 2022

The dollar bounced on Thursday after a Russian news report of mortar fire in eastern Ukraine

Russia-backed rebels accused Ukrainian forces of shelling their territory
Russia has amassed more than 100,000 troops close to Ukraine's borders
The euro fell as much as 0.4% as traders immediately saw risks of a wider war

The U.S dollar index was down yesterday, hitting its lowest level since Friday after minutes from the last U.S. Federal Reserve meeting suggested policymakers are not set on a particular pace of interest rate hikes.

According to the January meeting minutes released yesterday, Fed officials last month agreed that, with inflation widening its grip on the economy and employment strong, it was time to tighten monetary policy, but also that decisions would depend on a meeting-by-meeting analysis of data.

Strategists said the minutes suggested policymakers may not be as hawkish as investors feared. Members were not as aggressive as some had expected, which is being reflected in the modest sell-off of the dollar. We are taking these minutes with a grain of salt anyway, as the meeting happened before the recent CPI and PPI data, which were considerably higher than the forecast.

Economic Calendar

Earlier this week, St. Louis Fed President James Bullard reiterated calls for a faster pace of Fed rate hikes, and stronger-than-expected U.S. economic data including Wednesday's U.S. retail sales data have helped to underscore that view. Those expectations have helped to give support to the dollar in recent sessions. At the Fed's Jan. 25-26 meeting, policymakers agreed that it would "soon be appropriate" to raise the Fed's benchmark overnight interest rate from its near-zero level.

President Joe Biden said that a Russian attack on Ukraine remains a possibility

On the geopolitical front, the United States and NATO said Russia was still building up troops around Ukraine on Wednesday despite Moscow's insistence it was pulling back. Russia-backed rebels accused Ukrainian forces of shelling their territory in violation of agreements aimed at ending the conflict in the contested Donbas area, the RIA news agency said, a report later denied by Ukraine. Russia has amassed more than 100,000 troops close to Ukraine's borders and the West has threatened Russia with new sanctions if it attacks.

Euro

The single currency fell as much as 0.4% today in the Asian session as traders immediately saw the risks of a wider war. But Ukraine's denial and the location of the reported attack within already contested territory calmed things. The standoff on Europe's eastern edge is one of the deepest crises in East-West relations for decades. Overall, the EUR/USD traded with a low of 1.1343 and a high of 1.1394 before closing the day around 1.1371 in the New York session.

Investors are lost in the fog of war and that’s why we are seeing this volatility

Yen

The Japanese Yen traded lower despite Japan's exports rising 9.6% in January from a year earlier, Ministry of Finance data showed today. The rise was weaker than the 16.5% increase expected by economists in a Reuters poll and follows the growth of 17.5% in December. January imports rose 39.6% year-on-year, versus the median estimate for a 37.1% increase. Overall, the USD/JPY traded with a low of 115.33 and a high of 115.77 before closing the day around 115.47 in the U.S session.

British Pound

The British Pound gained as Britain's inflation rate hit its highest since March 1992 in January when it rose to 5.5% and is expected to extend its climb to above 7% in April, prompting fears of the sort of wage-price spiral that once dogged the country's economy. The market is looking at two central banks that are both hawkish. Overall, the GBP/USD traded with a low of 1.3529 and a high of 1.3599 before closing the day at 1.3583 in the New York session.

Tensions in Eastern Europe pushed demand for the dollar and the safe-haven yen

Canadian Dollar

The Canadian Dollar strengthened against its U.S counterpart as oil prices rose and domestic data showed inflation further heating up in January. Canada's annual inflation rate accelerated in January to a 30-year high of 5.1%, as food and housing costs continued to rise, while the average of the Bank of Canada's three core measures rose to 3.2%. Overall, USD/CAD traded with a low of 1.2661 and a high of 1.2723 before closing the day at 1.2684 in the New York session.

Australian Dollar

The Australian Dollar heading for the third day of gains as markets remained optimistic on Ukraine and local data showed the labor market had weathered a wave of coronavirus cases. Australian data showed the economy still managed to create a net 12,900 jobs in January even as an Omicron COVID-19 wave slugged activity, keeping unemployment at a 13-year low of 4.2%. 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.

The United States said Russia has massed enough troops near Ukraine to launch a major invasion

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 gained 0.03%.

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 gained 0.25%.

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 gained 0.55%.

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 lost 0.22%.

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 gained 0.04%.

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Wednesday 16 February 2022

The oil market remains tight and prices are still on course for a move towards $100 a barrel

Wall Street ended sharply higher yesterday, as signs of de-escalating tensions along the Russia-Ukraine border sparked a risk-on session. All three major indexes notched solid advances on the day, with market-leading tech and tech-adjacent stocks providing the biggest boost and putting the NASDAQ, which gained 2.5%, out front.

The Philadelphia SE Semiconductor index jumped 5.5% in its largest one-day percentage gain since March 2021. Geopolitical heat was turned down a notch after Russia said it had withdrawn some of its troops near the Ukraine border, prompting bullish equities sentiment and causing crude prices to slide on easing supply concerns. The announcement received guarded responses, and the United States and NATO said they had yet to see evidence of a drawdown.

Stocks briefly pared gains late in the session, when U.S President Joe Biden said that while diplomatic efforts are ongoing. Markets have been moving based on Putin or Federal Reserve Chairman Jerome Powell.

Economic Calendar

Dow Jones Industrial Average

The Dow Jones Industrial Average rose 1.22%. The best performers of the session on the Dow Jones Industrial Average were Salesforce.com Inc., which rose 3.80% or 7.85 points to trade at 214.25 at the close. Meanwhile, Boeing Co added 3.66% or 7.69 points to end at 217.73 and American Express Company was up 2.93% or 5.63 points to 197.98 in late trade. The worst performers of the session were Chevron Corp, which fell 0.73% or 0.99 points to trade at 134.26 at the close. 3M Company declined 0.42% or 0.67 points to end at 157.34 and International Business Machines was down 0.16% or 0.21 points to 129.94.

NASDAQ 100

The NASDAQ index added 2.53%. The top performers on the NASDAQ Composite were Resonant Inc. which rose 256.91% to 4.390, Color Star Technology Co Ltd which was up 93.11% to settle at 0.8881 and Tower Semiconductor Ltd which gained 42.08% to close at 47.07. The worst performers were Larimar Therapeutics Inc. which was down 52.09% to 4.010 in late trade, Hudson Capital Inc. which lost 31.82% to settle at 3.420 and Medpace Holdings Inc. which was down 20.30% to 138.87 at the close.

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Oil

Oil prices recouped losses today after slipping more than 3% in the previous session, as investors gauged the impact of easing Russia-Ukraine tension against a taut balance of tight global supplies and recovering fuel demand. U.S crude was at $92.71 a barrel, up 64 cents, or 0.7%, after the contract ended Tuesday's session down 3.6%.

The price of Brent jumped 50% in 2021, while WTI soared about 60%, as a global recovery in demand from the COVID-19 pandemic strained supply. Moscow's Tuesday announcement of a partial pullback in troops from Ukraine's borders was met with skepticism, as U.S President Joe Biden warned that more than 150,000 Russian troops were still massed near the borders. But beyond the Ukraine tension, the oil market remains tight and prices are still on course for a move towards $100 a barrel. Technically we could see prices heading back to $90 a barrel on profit-taking, but they will trend higher towards $100 as the economy is getting back on track.

Precious and Base Metals

Gold prices ticked higher as the dollar slid on Wednesday after safe-haven bullion retreated from an eight-month high in the previous session on easing fears of a Russian invasion of Ukraine. Spot gold gained 0.2% to $1,856.83 per ounce. U.S gold futures were nearly steady at $1,857.80. Gold prices touched their highest level since June last year on Tuesday, before reversing course to close almost 1% lower.

Asian shares rallied after Moscow indicated it was returning some troops to base from exercises. Looking ahead, the more fungible dollar is the preferred safe haven to gold among core investors and could fall on any further de-escalation in the Ukraine crisis, prompting a rally in gold and vice-versa. The dollar dipped slightly on Wednesday, making greenback-priced bullion cheaper for buyers holding other currencies.

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British consumer prices rose at the fastest annual pace in nearly 30 years last month, reinforcing the chances that the Bank of England will raise interest rates for the third meeting in a row. Elsewhere, the U.S. Federal Reserve will kick off its tightening cycle in March with a 25 basis-point interest rate hike, a Reuters poll found, but a growing minority says it will opt for a more aggressive half-point move to tamp down inflation.

Besides weekly momentum indicators and buying the 'dip' indicating that the path of least resistance is higher, most traders do expect higher volatility to be a main-stay of gold markets going forth as rumors and market whispers increase. Among other precious metals, spot silver rose 0.8% to $23.53 per ounce, platinum firmed 0.3% to $1,028.28, and palladium climbed 1.7% to $2,286.52. Copper prices firmed today as easing fears of a Russian invasion of Ukraine boosted risk appetite, with investors closely watching the release of the Federal Reserve's January policy meeting minutes for clues on the roadmap for rate hikes. Three-month copper on the London Metal Exchange (LME) was up 0.2%.

Traditional Agricultures

Wheat and corn futures fell yesterday as Moscow’s announcement that some of its troops were returning to base after drills tempered investor fears of a Russian invasion of Ukraine that could disrupt Black Sea export flows. Soybean fell as traders assessed chances for rain in dry growing belts in Argentina.

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President Joe Biden said that a Russian attack on Ukraine remains a possibility

The U.S dollar was down as investors absorbed the latest news on the Russia-Ukraine standoff
Concern over the standoff has driven gains recently in the safe-haven dollar
The euro's rally from the previous day petered out in today’s Asian trading session

The U.S dollar was down slightly yesterday as investors absorbed the latest news on the Russia-Ukraine standoff, with the dollar index briefly paring some of its losses late in the day after President Joe Biden said that a Russian attack on Ukraine remains a possibility.

Biden, in nationally televised remarks, also said reports that some Russian forces have moved away from the Ukraine border have not yet been verified by the United States. Earlier, Russia said that some of its troops were returning to base after exercises near Ukraine, news that appeared to reduce investor anxiety over the crisis in the region.

Economic Calendar

Concern over the standoff has driven gains recently in the safe-haven dollar, but investors mostly took a risk-on view yesterday, with U.S. stocks rising. The U.S dollar index was last down 0.3%, while the euro was up 0.5% against the dollar at $1.1358. The U.S dollar was up 0.1% against the yen at 115.64 and up 0.1% against the Swiss franc at 0.9255. Biden also said the U.S is "not seeking direct confrontation with Russia" but that if Russia were to attack Americans in Ukraine, "We will respond forcefully."

Market participants will also remain alert to any comments this week from U.S. Federal Reserve officials on the interest rate hike outlook. Fed officials continue to spar over how aggressively to begin raising rates at their March meeting, with St. Louis Fed President James Bullard on Monday reiterating calls for a faster pace of Fed rate hikes. Other Fed officials have been less willing to commit to a half-point hike or were even concerned it could cause trouble.

The ECB has joined its central bank peers in signaling a hawkish turn in its monetary policy at a meeting this month. Investors also assessed data showing U.S producer prices increased by the most in eight months in January.

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Euro

The single currency rally from the previous day petered out in Asia today, though it held its overnight gains, as optimism after reports that some Russian forces had moved away from the Ukraine border, was tempered by news of a cyberattack. The greenback "shed ground overnight as the Ukraine geopolitical risk premium came out of markets. Overall, the EUR/USD traded with a low of 1.1278 and a high of 1.1367 before closing the day around 1.1305 in the New York session.

Yen

The Japanese Yen steadied as investors absorbed the latest news on the Russia-Ukraine standoff, with the dollar index briefly paring some of its losses after President said that a Russian attack on Ukraine remains a possibility. Biden, in nationally televised remarks, also said reports that some Russian forces have moved away from the Ukraine border. Overall, the USD/JPY traded with a low of 114.99 and a high of 115.73 before closing the day around 115.52 in the U.S session.

British Pound

The British Pound weakened against the dollar and the euro yesterday, as the single currency firmed on reports that Russia was returning some troops near Ukraine to their bases. Data showed that annual pay growth in Britain in the final quarter of 2021 edged up to 4.3% from 4.2% in the three months to November. Overall, the GBP/USD traded with a low of 1.3493 and a high of 1.3570 before closing the day at 1.3525 in the New York session.

Canadian Dollar

The Canadian Dollar was little changed against its U.S counterpart yesterday as investors weighed tentative signs of easing tension in Ukraine and looked ahead to key Canadian inflation data. Oil has been supported in recent weeks by the prospect of a disruption in Russian energy supplies. Domestic data showed that home prices jumped 4.9% in January. Overall, USD/CAD traded with a low of 1.2717 and a high of 1.2781 before closing the day at 1.2727 in the New York session.

Australian Dollar

The Australian Dollar edged higher today as markets chose to focus on hopeful signs for Ukraine, while bonds were battered by another surprisingly strong reading on U.S inflationary pressures. The improvement in risk sentiment hit bonds hard, as did a high reading of U.S producer prices that only added to talk of a half-point rate increase. 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.

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Euro-Yen

Sterling-Yen

Aussie-Yen

Euro-Sterling

Sterling-Swiss

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Tuesday 15 February 2022

Investors are lost in the fog of war and that’s why we are seeing this volatility

Wall Street indexes turned sharply lower yesterday, as news that the United States is closing its Kyiv embassy in Ukraine heightened geopolitical tensions and prompted a sell-off in choppy trading.

All three major indexes fell after the Wall Street Journal reported on the relocation of U.S. diplomatic operations to western Ukraine, in a possible harbinger of an imminent Russian invasion. Ukraine President Volodymyr Zelenskiy urged state officials, politicians, and business leaders who have recently left the country to return within 24 hours to show unity.

Investors don’t like uncertainty, and this is obviously a period of increased uncertainty and that’s why you’re seeing this volatility. Geopolitical anxieties have been simmering in recent weeks as negotiators scrambled to find a diplomatic path forward as Russia massed troops along the Ukrainian border. Recent data showed U.S. inflation at its hottest level in decades, ratcheting up concerns that the Fed could begin hiking key interest rates more aggressively than many had anticipated.

Economic Calendar

Dow Jones Industrial Average

The Dow Jones Industrial Average fell 0.49%. The biggest gainers of the session on the Dow Jones Industrial Average were Nike Inc., which rose 1.01% or 1.41 points to trade at 141.59 at the close. Walt Disney Company added 0.92% or 1.38 points to end at 150.85 and Coca-Cola Co was up 0.65% or 0.39 points to 60.68 in late trade. The biggest losers included Walgreens Boots Alliance Inc., which lost 2.75% or 1.34 points to trade at 47.36 in late trade. International Business Machines declined 1.91% or 2.54 points to end at 130.15 and Chevron Corp shed 1.54% or 2.14 points to 136.67.

NASDAQ 100

The NASDAQ index lost 0.03%. The top performers on the NASDAQ Composite were BioDelivery Sciences International which rose 52.75% to 5.560, Knightscope Inc. which was up 32.91% to settle at 8.40 and Alpine 4 Holdings Inc. which gained 22.30% to close at 1.81. The worst performers were Dave Inc. which was down 36.91% to 5.88 in late trade, RumbleON Inc. which lost 30.22% to settle at 26.86 and Gravity Co Ltd which was down 26.45% to 45.44 at the close.

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Oil

Oil dropped from a seven-year high to around $94 a barrel, pressured by a report that some troops in Russia's military districts adjacent to Ukraine are returning to bases, a move that could de-escalate tension between Moscow and the West.

Russia's Interfax news agency cited the defense ministry as saying that while large-scale drills across the country continued, some units of the Southern and Western military districts have completed their exercises and started returning to base. U.S crude dropped $2.00, or 2.1%, to $93.46.

There are no prizes for guessing the driving force behind this bout of volatility. The Russia-Ukraine crisis has put the energy market on high alert for possible disruptions of Russian energy supplies. Britain's Foreign Secretary Liz Truss said on Tuesday a Russian invasion of Ukraine was highly likely, although Prime Minister Boris Johnson and U.S. President Joe Biden agreed in a call on Monday there was a crucial window for diplomacy.

Investors are also watching talks between the United States and Iran on reviving Tehran's nuclear deal with world powers.

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Precious and Base Metals

Gold prices were steady near an eight-month high today, has heightened tensions between Russia and the West over Ukraine prompted investors to shun riskier assets and opt for safe-haven bullion. Spot gold was steady at $1,869.46 per ounce, after hitting its highest level since June 11 at $1,879.48 earlier. U.S. gold futures rose 0.5% to $1,878.00.

Due to the Ukraine crisis, gold is supported through the inflation channel because of higher crude oil prices and through the risk aversion channel because of lower stocks, said Stephen Innes, managing partner at SPI Asset Management. If we lose that Ukraine impulse, then gold comes off quite quickly. Bullion is usually perceived as a hedge against geopolitical conflicts, and with simmering tensions surrounding Ukraine, spot gold has risen about 5% since Jan. 31 and is set for the tenth session of gains in 12.

The (gold) market seems to be ignoring major central banks right now because investors are lost in the fog of war and it becomes very difficult to have a salient macro or fundamental view in this type of market where you really have to just go trade on a hair-trigger.

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Further supporting bullion, benchmark U.S 10-year Treasury yields eased, decreasing the opportunity cost of holding non-interest-paying gold, while a slightly weaker dollar helped make the metal more attractive for overseas buyers. If Russia further reduces gas supply into Europe, leading to higher energy prices across the board, that will be a positive for gold. I do however expect gold to top out around $1,920-$1,930 roughly.

Elsewhere, spot silver fell 0.7% to $23.66 per ounce, platinum was down 0.2% to $1,025.81, and palladium dipped 2.4% to $2,303.45. Copper prices, often viewed as a gauge of global economic health, fell on Tuesday as tensions at the Ukrainian border prompted investors to scale back purchases of riskier assets. Three-month copper on the London Metal Exchange (LME) was down 0.4%.

Traditional Agricultures

Corn and wheat ended higher after earlier losses, with corn underpinned by strong export inspections and wheat weighing tensions between Russia and Ukraine that could threaten Black Sea exports. Soybean fell, pressured by rainfall in parts of South America that could refresh parched crops.

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Tensions in Eastern Europe pushed demand for the dollar and the safe-haven yen

The U.S dollar index reached a two-week high on growing worries about Russia-Ukraine tensions
The euro edged up a little today but was still nursing bruises after two sessions of sharp losses
The Canadian dollar edged lower against the greenback in yesterday’s trading session

U.S dollar index reached a two-week high yesterday on growing worries about Russia-Ukraine tensions and as St. Louis Federal Reserve President James Bullard reiterated calls for faster U.S Federal Reserve interest rate hikes.

The index briefly jumped further in afternoon trading after Ukraine President Volodymyr Zelenskiy urged Ukrainians to fly the country's flags from buildings and sing the national anthem in unison on Feb. 16, a date some Western media have cited as the possible start of a Russian invasion.

The comments spooked investors, who have fled to the safe-haven dollar amid the escalating geopolitical problem, but the dollar index quickly came off those highs. Ukrainian officials said Zelenskiy was not predicting an attack on that date but instead responding with skepticism to foreign media reports. United Nations Secretary-General Antonio Guterres said he was deeply worried about "increased speculation" about a military conflict, and urged world leaders to step up diplomacy to calm the situation.

Economic Calendar

Washington had said Russia could invade Ukraine "any day now," and British Prime Minister Boris Johnson on Monday called the situation "very, very dangerous." The big driver clearly tensions in Ukraine.

Markets are in risk-off mode across the board. Earlier Monday, Bullard also said four strong inflation reports in a row warranted action and that the central bank needed to "ratify" market expectations of its upcoming moves. Last week's stronger-than-expected U.S. consumer price index report has driven speculation the Fed might raise rates by a full 50 basis points in March.

Clearly, we still have the aftershocks of last week's inflation report and St. Louis Fed president Bullard's comments. The move into safe-haven assets has overshadowed expectations for monetary policy tightening from the European Central Bank. ECB President Christine Lagarde also recently reiterated that any policy action would be gradual.

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Euro

The single currency edged up a little in Asian trading today but was still nursing bruises after two sessions of sharp losses as tensions in Eastern Europe pushed demand for the dollar and the safe-haven yen. Moves were slightly more cautious elsewhere and the overall result was that the dollar index, which tracks the greenback against six peers. Overall, the EUR/USD traded with a low of 1.1278 and a high of 1.1367 before closing the day around 1.1305 in the New York session.

Yen

The Japanese Yen traded higher on growing worries about Russia-Ukraine tensions and as St. Louis Federal Reserve President James Bullard reiterated calls for faster U.S Federal Reserve interest rate hikes. Ukraine President Volodymyr Zelenskiy urged Ukrainians to fly the country's flags from buildings and sing the national anthem in unison on Feb. 16. Overall, the USD/JPY traded with a low of 114.99 and a high of 115.73 before closing the day around 115.52 in the U.S session.

British Pound

The British Pound fell to a one-week low against a stronger dollar yesterday as the possibility of war in Ukraine, along with the prospect of a Federal Reserve rate hike, gave investors reason to turn more risk-averse. Hotter-than-expected US inflation data last week also weighed on investor sentiment, as markets bet the Federal Reserve will lift rates. Overall, the GBP/USD traded with a low of 1.3493 and a high of 1.3570 before closing the day at 1.3525 in the New York session.

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Canadian Dollar

The Canadian Dollar edged lower against the greenback yesterday, as investors weighed warnings that Russia could invade Ukraine at any time and a major trade route between Canada and the United States reopened. Hints by Ukraine at possible concessions to Russia helped cap the price of oil, one of Canada's major exports. Overall, USD/CAD traded with a low of 1.2717 and a high of 1.2781 before closing the day at 1.2727 in the New York session.

Australian Dollar

The Australian Dollar marked time today as global markets waited to see how events in Ukraine would unfold, while strength in energy and metals prices favored the Aussie over the kiwi. Hobbling the Aussie has been the dogged dovishness of the Reserve Bank of Australia (RBA), with minutes of its latest meeting confirming it was in no rush to raise rates. 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

Sterling-Yen

Aussie-Yen

Euro-Sterling

Sterling-Swiss

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Monday 14 February 2022

The United States said Russia has massed enough troops near Ukraine to launch a major invasion

A Russian attack could begin any day and would likely start with an air assault
The dollar had been trading mostly sideways when the U.S warning hit markets
The Canadian dollar weakened as the potential for an imminent Russian attack triggered a sell-off

The dollar rose along with other safe-haven assets on Friday after the United States said Russia has massed enough troops near Ukraine to launch a major invasion.

A Russian attack could begin any day and would likely start with an air assault, White House national security adviser Jake Sullivan told a media briefing. The dollar had been trading mostly sideways when the U.S. warning hit markets. The dollar index, a measure of the greenback against six major currencies, rose 0.258%.

Economic Calendar

U.S crude futures jumped more than 5% to $94.66 a barrel, the highest since 2014, while gold rose more than 2% to a near two-month high at one point. The dollar's rise was due to Sullivan's comments, as well as reports that Russian President Vladimir Putin had decided to invade Ukraine, which the White House later disputed. That move up, along with moves in other safe-haven assets such as U.S. Treasuries and the Japanese yen, indicates the market is growing more and more concerned about the prospect of an invasion.

The Japanese yen strengthened 0.63% versus the greenback at 115.29 per dollar, while the Canadian dollar weakened as the potential for an imminent Russian attack triggered a sell-off in risk-sensitive assets. Russia's currency, already lower for the day, fell further on the news.

The rouble was last down 2.73% versus the greenback at 77.00 per dollar. Washington urged all U.S. citizens to leave the country within 48 hours. Other countries, including Britain, Japan, Latvia, Norway, and the Netherlands told their citizens to leave Ukraine immediately.

The euro, meanwhile, weakened as markets processed the news, and was set for a weekly decline after European Central Bank President Christine Lagarde said in an interview that raising rates now would not bring down record eurozone inflation but only hurt the economy.

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The greenback had struggled to pick a direction earlier in the day as investors digested the University of Michigan’s preliminary consumer sentiment index for February. That report found that U.S. consumer sentiment fell to its lowest level in more than a decade in early February amid expectations that inflation would continue to rise in the near term.

Economists polled by Reuters had forecast the index edging up. The market's lack of clarity as to how interest rate hikes might progress has contributed to frenzied sessions this week as the dollar remains undecided on the future. I tend to think we consolidate in the short term here and am still biased toward euro downside, dollar upside against most currencies. Wall Street tumbled and safe-havens such as U.S. Treasuries and the U.S. dollar rallied after Washington said Russia has massed enough troops near Ukraine to launch a major invasion.

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Euro

The single currency fell against the U.S Dollar as traders on edge about the prospect of war in Europe and unsettled by soaring inflation. The risk of war in Ukraine pushed the euro down on Friday and it was nursing losses well below last week's top of $1.1495. Russia could invade Ukraine at any time and might create a surprise pretext for an attack. Overall, the EUR/USD traded with a low of 1.1413 and a high of 1.1461 before closing the day around 1.1441 in the New York session.

Yen

The Japanese Yen gained after the U.S said Russia has massed enough troops near Ukraine to launch a major invasion. A Russian attack could begin any day and would likely start with an air assault, White House national security adviser Jake told a media briefing. The dollar index, a measure of the greenback against six major currencies, rose 0.258%. Overall, the USD/JPY traded with a low of 114.89 and a high of 115.36 before closing the day around 115.09 in the U.S session.

British Pound

The British Pound held its ground on Friday and posted a second consecutive weekly gain as expectations of rising interest rates propped up the currency. The pound’s strength against the dollar was in stark contrast to the greenback’s other major rivals, which weakened in early trading amid rising expectations of U.S interest rate increases in the coming weeks. Overall, the GBP/USD traded with a low of 1.3488 and a high of 1.3549 before closing the day at 1.3534 in the New York session.

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Canadian Dollar

The Canadian Dollar weakened, giving back some of this week's gains, as the potential for an imminent Russian attack on Ukraine triggered a selloff in risk-sensitive assets. Wall Street tumbled and safe-havens such as U.S Treasuries and the U.S dollar rallied after Washington said Russia has massed enough troops near Ukraine to launch a major invasion. Overall, USD/CAD traded with a low of 1.2655 and a high of 1.2754 before closing the day at 1.2664 in the New York session.

Australian Dollar

The Australian Dollar left drifting as geopolitical concerns over Ukraine offset further gains in global commodity prices as inflation becomes more broad-based. The Aussie was also under pressure given the Reserve Bank of Australia (RBA) was showing little urgency to tighten, while the market was rife with speculation the U.S Federal Reserve could hike by 50 basis points next month. 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.

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Euro-Yen

Sterling-Yen

Aussie-Yen

Euro-Sterling

Sterling-Swiss

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