The U.S. dollar is rallying across the board this morning as global equities dump their value as traders evaluate the knock-on effect of the severe sanctions placed on Russia by the West.
Overview
S&P futures show the index is set to open an astounding 2.9% lower at the open. The price of commodities is also skyrocketing on more intense fears over supply issues.The Russian ruble lost as much as 40% of its value following sanctions including plans to take some Russian banks off the Swift system and make it harder for the Russian Central Bank to utilize reserves denominated in foreign currencies. The central bank hiked interest rates from 9.5% to 20.0% to stop the ruble’s plunge. There is no top-tier data on today’s docket and only one Fed speaker, so Russia will continue to take center stage. President Joe Biden will hold his State of the Union before Congress tomorrow night. While originally expected to be a reset on his economic agenda, the speech is likely to be heavy on geopolitics and Western coordination towards Russian aggression.
What to Watch Today…
- No major economic events are scheduled for today
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EUR
The Euro fell over a percent overnight before paring some of its losses. Still, EUR/USD is 0.6% lower than Friday’s close. The European economy is at risk as much of the continent relies on Russian energy. Shares of European banks with links to Russia are in a tailspin this morning.As stated above, all eyes are on Russia this morning. Eurozone consumer prices are due out Wednesday and the European Central Bank will release the minutes of its February meeting on Thursday morning.
CAD
The Canadian dollar is down 0.2% but fell as much as 0.9% against its American counterpart as demand for havens boosted the greenback. The loonie has found support against some of its other rivals as the sharp uptick in energy prices has helped commodity-based currencies against the Euro and British pound. The economic docket showed that the price of industrial products rose 6.5% month over month in January, highlighting the continued inflation pressures.
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