The U.S. Dollar is taking back its losses from yesterday as the globe’s hopes for breakthroughs in Russia-Ukraine talks have dimmed with reports from Ukrainian President Volodymyr Zelenskyy that Russia is trying to damage his nation’s ability to produce food by attacking agriculture.
Overview
Supplies of everything are causing havoc all over the world as we have entered a period of scarcity inflation. The energy crisis developing and the inflationary growth in oil have convinced U.S. President Joe Biden to dip into the nation’s strategic reserves for several months which could mean producing 1.0 million barrels a day. Biden is expected to make the official announcement later today at around 1:20 PM.Once more, the direction of the buck is not clear and the back-and-forth between optimism and pessimism over the war’s ongoing turmoil is creating one of the worst environments for investment. Worldwide, stocks are about to close their worst quarter in two years.There are concerns over the effects that combating inflation in the U.S. via rate hikes could have on growth after a very uneven recovery “post-pandemic.” China, meanwhile, is adding to its regulatory arm by proposing the raising of hundreds of billions in Yuan to create a safety net for financially troubled companies. There is also not yet a permanent deal that could allow Chinese firms to remain trading in American exchanges. For today, the greenback will likely keep all peers in red.
What to Watch Today…
- Biden talks about strategic oil reserves 1:20 PM
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EUR
The Euro has been swinging by half a percent daily all week, unable to find guidance as the problems mount from the lack of peace on the Eastern front. Undesirable records for lack of consumer confidence and price growth across all EU nations are making traders wonder how much worse things could get.
Relief from American production could help, but there are worries within leadership that other countries will be helping Russia while EU allies put pressure to isolate Russian economic endeavors. India could potentially agree to a deal in which Russia sells them very cheap oil. It establishes the point that resources matter more to nations than relations.
GBP
The Pound is neither improving nor falling as doubts grow over the length of the war and the lack of progress in peace talks. The Bank of England is expected to raise interest rates one more time to battle inflation at their May 5th meeting and growth has been achieved after lifting COVID restrictions, but nothing is boosting its value.
In fact, Q4 Gross Domestic Product figures showed better than expected growth at 1.3% vs. 1.0%, but closer revision shows growth in inventories, not necessarily a big contributor to strong growth, just production. Revisions to outlooks have mostly been downgraded across countries. For now, this bodes quite well for buck strengthening.
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