Euro (EUR) Pressured as Russia Strikes Kyiv
The Euro (EUR) also saw some volatility yesterday, heading lower through the European trading session against its stronger rivals, as markets reacted to the latest news from Ukraine.
After an attack on Russia’s symbolic Kerch Bridge, which connects mainland Russia to the annexed Crimean peninsula in Ukraine, the Kremlin ordered a wave of missile strikes on multiple Ukrainian cities. Fears that this may represent a new phase in the conflict dented the single currency.
Today, headlines around the Russia-Ukraine war may continue to drive EUR. Any further signs of escalation could see the single currency slip even further.
US Dollar (USD) Climbs amid Risk-Off Trade
Widespread risk aversion boosted the safe-haven US Dollar (USD) yesterday as the intensification of the Russia-Ukraine crisis spooked global markets.
In addition, ongoing expectations of large interest rate rises from the Federal Reserve underpinned the ‘Greenback’.
Looking ahead, economists expect the latest US economic optimism index and consumer inflation expectations to have fallen. Could this dampen Fed rate hike bets, thereby denting USD?
Pound (GBP) Propped Up as Fiscal Plan Brought Forward
The Pound (GBP) fluctuated yesterday but managed to recoup overnight losses against many of its peers.
The mixed movement came as the escalation in the Russia-Ukraine war rattled markets, weighing on the increasingly risk-sensitive Pound. However, Chancellor Kwasi Kwarteng confirmed that he would bring forward his fiscal plans by three weeks, which cheered GBP investors somewhat.
This morning Sterling has dropped amid mixed employment data and a further intervention from the Bank of England (BoE). The BoE has widened its bond-buying scheme, saying that current market dysfunction poses ‘a material risk to UK financial stability’.
Canadian Dollar (CAD) Rises despite Muted Oil
The commodity-linked Canadian Dollar (CAD) managed to firm against many of its peers yesterday, despite wavering oil prices, without a clear catalyst for the movement.
In the ongoing absence of Canadian data today, oil price dynamics may impact the ‘Loonie’.
Australian Dollar (AUD) Dips as Confidence Drops
The Australian Dollar (AUD) weakened overnight amid a bearish market mood and falls in both Australian consumer and business confidence.
New Zealand Dollar (NZD) Rebounds from Risk-Off Fall
The risk-sensitive New Zealand Dollar (NZD) initially fell in downbeat overnight trade. However, the ‘Kiwi’ seemingly entered oversold conditions and bounced amid some dip-buying.