- USD/JPY round turns on conflicting Ukraine headlines driving risk sentiment.
- World leaders will engage in high stake meetings this week over the threat of the Russian invasion.
- Fed sentiment coming through as hawkish Fed speakers advocate 50bps hike in March.
USD/JPY is back on the bid following a series of information that is crossing the wires with regards to the prospects of a Russian invasion. In recent trade, the President of Ukraine Volodymyr Zelensky was reported to have said that the Ukraine “has been informed” that Wednesday, February 16 “will be the day of the attack”. This sent the yen higher and financial markets into risk-off mode again:
However, as the chart illustrates above, the price turned on a dime when a senior Ukrainian official denied that President Zelensky was being literal when he said in an address to the nation that he'd been told a Russian attack would begin on February 16th. Mykhailo Podoliak, a Presidential adviser, said that Zelensky was being ironic. Meanwhile, the risk is very real and markets are on high alert and on tenterhooks. The yen stands to benefit from risk aversion, especially through crosses such as AUD/JPY. Traders will be waiting for leaders to meet, with the French president visiting Moscow and the US president meeting with the Zelensky at the White House on Wednesday.
As for other fundamental drivers, the US dollar index reached a two-week high on Monday, as St. Louis Federal Reserve President James Bullard reiterated calls for a faster pace of U.S. Federal Reserve interest rate hikes. Bullard on Monday also said that four strong inflation reports in a row warranted action. Last week's stronger-than-expected US Consumer Price index report has driven speculation the Fed might raise rates by a full 50 basis points in March.
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 extends recovery toward 1.0800 as USD retreats ahead of Fed
EUR/USD continues to push higher toward 1.0800 on Thursday. The pair finds support from a broad US Dollar retreat, as traders unwind their Trump win-inspired USD longs ahead of the Federal Reserve's highly-anticipated policy announcements.
GBP/USD rebounds above 1.2950 after BoE policy announcements
GBP/USD trades in positive territory above 1.2950 on Thursday. The Bank of England (BoE) lowered the policy rate by 25 basis points as expected but the upward revision to inflation projections helped the pair edge higher. Market focus now shifts to the Fed's policy decisions.
Gold nears $2,700 as Fed’s announcement looms
Gold recovers following Wednesday's sharp decline and trades above $2,680. The benchmark 10-year US Treasury bond yield edges lower after Trump-inspired upsurge, allowing XAU/USD to hold its ground ahead of the Fed policy decisions.
Federal Reserve expected to deliver 25 bps interest-rate cut, shrugging off Trump victory
The Federal Reserve is widely expected to lower the policy rate after Donald Trump won the US presidential election. Fed Chairman Powell’s remarks could provide important clues about the rate outlook.
Outlook for the markets under Trump 2.0
On November 5, the United States held presidential elections. Republican and former president Donald Trump won the elections surprisingly clearly. The Electoral College, which in fact elects the president, will meet on December 17, while the inauguration is scheduled for January 20, 2025.
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.