- EUR/USD prints the biggest daily fall in a month as market sentiment sours on geopolitical concerns.
- Russia formally invades Ukraine, tries to seize Kyiv airport, attacks capital.
- Hawkish comments from Fed’s Daly battles upbeat ECB speakers.
- Second reading of US Q4 GDP will decorate calendar but risk catalysts will keep the driver’s seat.
EUR/USD bears attack 1.1200, down 0.75% intraday near 1.1210 as Russian forces play their role to shake global markets, as already feared by the West. The geopolitical tussles propelled the safe-havens and oil prices during early Thursday morning in Europe.
That said, the latest update from Ukraine’s Interior Ministry confirms the media reports that Kyiv is under attack from the cruise and ballistic missiles.
Previously, North Atlantic Treaty Organization (NATO) officially confirmed Russia’s military action whereas CNN marked multiple explosions in Ukrainian cities.
In a response to Moscow’s military move, US President Joe Biden promised “further consequences” for Russia while US Senator Marco Rubio, also the Vice-Chairman of the Select Committee on Intelligence, said that Russian airborne attempts seizing control on Kyiv airport.
Amid the influx of risk-aversion, the US 10-year Treasury yields snap two-day rebound by declining around nine basis points (bps) to 1.88% whereas S&P 500 Futures drop over 2.0% by the press time. It should be observed that the US Dollar Index (DXY) rises 0.50% intraday due to its safe-haven appeal at the latest.
It should be observed that the early-day comments from San Fransisco Fed President Mary Daly also propel the US dollar amid fears of faster Fed rate hikes. The policymaker cited 'more urgency' on rate hikes in her latest speech.
On Wednesday, The European Central Bank (ECB) governing board member Robert Holzmann said in an interview with NNZ, “it is possible for ECB to hike rates before ending bond purchases.” On the same line were comments from ECB policymaker Bostjan Vasle. However, the central bank’s board member Francois Villeroy de Galhau said Wednesday, “we will assess the more indirect consequences of Ukraine crisis on inflation and growth in March.” “We will be facts-driven,” adds ECB’s Villeroy
That said, market players will keep their eyes on the risk catalysts but the second reading of the US Q4 GDP, expected 7.0% annualized versus 6.9% prior, will also be important to watch.
Technical analysis
A clear downside break of an upward sloping trend line from February 03, around 1.1290, directs EUR/USD towards November 2021 low of 1.1186.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays vulnerable near 1.0600 ahead of US inflation data
EUR/USD remains under pressure near 1.0600 in European trading on Wednesday. The pair faces headwinds from the US Dollar upsurge, Germany's political instability and a cautiou market mood, as traders look to US CPI data and Fedspeak for fresh directives.
GBP/USD trades with caution below 1.2750, awaits BoE Mann, US CPI
GBP/USD trades with caution below 1.2750 in the European session on Wednesday, holding its losing streak. Traders turn risk-averse and refrain from placing fresh bets on the pair ahead of BoE policymaker Mann's speech and US CPI data.
Gold price holds above $2,600 mark, bulls seem non committed ahead of US CPI
Gold price staged a modest recovery from a nearly two-month low touched on Tuesday. Elevated US bond yields and bullish USD cap gains for the non-yielding XAU/USD. Traders now look forward to the key US Consumer Price Index report a fresh impetus.
US CPI data preview: Inflation expected to rebound for first time in seven months
The US Consumer Price Index is set to rise 2.6% YoY in October, faster than September’s 2.4% increase. Annual core CPI inflation is expected to remain at 3.3% in October. The inflation data could significantly impact the market’s pricing of the Fed’s interest rate outlook and the US Dollar value.
Forex: Trump 2.0 – A high-stakes economic rollercoaster for global markets
The "Trump trade" is back in full force, shaking up global markets in the aftermath of the November 5th U.S. election. This resurgence has led to substantial shifts in both currency and bond markets, with the U.S. dollar index (DXY) jumping 2.0% + since election day.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.