Here is what you need to know on Monday, March 21:
The US dollar remained bid, as the market turned risk-averse on Monday amid a prolonged Russia-Ukraine war. Escalation of the conflict sapped investors’ confidence after Ukraine refused to surrender the embattled southern port city of Mariupol as Russia warned of humanitarian 'catastrophe’.
As the crisis intensified, it poured cold water on hopes for diplomacy seen over the previous week. Traders also weighed in the hawkish comments from Fed officials amid the fallout of the call between US President Joe Biden and China’s President Xi Jinping. President Biden warned China of consequences if it supported Russia’s invasion of Ukraine.
Meanwhile, markets were also disappointed after People’s Bank of China (PBOC) refrained from cutting the mortgage lending rates, leaving them unchanged in the first quarter of this year.
Mounting tensions surrounding the Ukraine crisis re-ignited the rally in oil prices, as European Union (EU) mulls whether to impose an oil embargo on Russia. The EU leaders and Biden are scheduled to meet on Monday to firm up the West's response to Moscow.
Traders now look forward to the speeches by ECB President Christine Lagarde and Fed Chair Jerome Powell later in the day, in absence of the first-tier economic news on both sides of the Atlantic.
Heading into the European session, the S&P 500 futures shed 0.34% on the day, indicative of a risk-off market profile while the US dollar index was last seen up 0.10% so far, trading around 98.35.
EUR/USD loses its recovery momentum and turns back into the red zone below 1.1050, courtesy of the risk-off flows-driven dollar’s strength, stabilizing Treasury yields. The shared currency ignores hawkish comments from ECB policymaker Robert Holzmann, as he argued for a rate hike.
GBP/USD extends its correction from weekly highs, now pressured around 1.3150. The BOE hiked key rates by 25 bps but showed hesitance in its future tightening plans. Soaring inflation continues to threaten economic growth. Focus this week remains on the UK inflation and Retail Sales data.
USD/JPY consolidates just below six-year highs of 119.41 reached last Friday, as the Fed-BOJ monetary policy divergence played out. The Japanese central bank left the policy settings unchanged yet again in its March meeting.
Gold finds support from the renewed geopolitical concerns, although the upside attempts could be limited below the 21-DMA of $1,941 amid a firmer dollar.
After the previous week’s recovery rally, Bitcoin has eased slightly, trading around $41,000. Ethereum lacks a clear directional bias around $2,850.
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
GBP/USD struggles around 1.2600 after BoE rate decision
GBP/USD retreated from its daily peak and battles around 1.2600 following the Bank of England monetary policy decision. The BoE kept the benchmark interest rate unchanged at 4.75% as expected, but the accompanying statement leaned to dovish. Three out of nine MPC members opted for a cut.
EUR/USD on the defensive around 1.0400 after upbeat US data
EUR/USD is under mild selling pressure around the 1.0400 mark following the release of upbeat United States data. Q3 GDP was upwardly revised to 3.1% from 2.8% previously, while weekly unemployment claims improved to 220K in the week ending December 13.
Gold price resumes slide, pierces the $2,600 level
Gold resumes its decline after the early advance and trades below $2,600 early in the American session. Stronger than anticipated US data and recent central banks' outcomes fuel demand for the US Dollar. XAU/USD nears its weekly low at $2,582.93.
Aave Price Forecast: Poised for double-digit correction as holders book profit
Aave (AAVE) price hovers around $343 on Thursday after correcting more than 6% this week. The recent downturn has led to $5.13 million in total liquidations, 84% of which were from long positions.
Fed-ECB: 2025, the great decoupling?
The year 2024 was marked by further progress in disinflation in both the United States and the Eurozone, sufficient to pave the way for rate cuts. The Fed and the ECB did not quite follow the same timetable and tempo, but by the end of the year, the cumulative size of their rate cuts is the same: 100 basis points.
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.