The U.S. Dollar is trading in tight ranges against some majors while gaining against recent gainers such as Australian as well as New Zealand Dollar.
Overview
In addition, other safe-haven tender Japanese Yen and Swiss Franc is losing ground following a statement from Russia’s Vladimir Putin indicating “positive shifts” in talks with Ukraine.The possibility of an end to the conflict is boosting equity markets as they get ready to trade for one last time after a very turbulent week of escalation and high alert. Inflationary woes remain as well as worry that economic growth will subside significantly if things keep sour.Meanwhile, the U.S. continues punishing Russia’s position in the global economy by taking away its “preferred trade” partner status and the White House received word from the largest U.S. fleet of nuclear power plants that it would fall in line with any limits President Biden sets on Russian uranium. Oil prices are up, but this week represented their worst performance since November. In Asia, a MSCI gauge of stocks tumbled for the fourth week in a row. There is a lot of pushing and pulling as the globe adjusts to a post-pandemic world with supply issues and potential humanitarian crises.
What to Watch Today…
- No major economic events are scheduled for today
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EUR
The Euro is trying to hold on to its gains of 1.5% for the week as the push to reduce any reliance on Russia continues. JP Morgan Chase added itself to the list of banks pulling out of Russia. On the data front, Spain and Germany’s inflationary figures in the form of the February Consumer Price Index came out slightly better than expected.
This points at a potential need down the line for the European Central Bank to raise interest rates. Expect more swings as the situation in Ukraine continues to develop every minute.
MXN
The Mexican Peso has strengthened by 1.8% this week as the chaos around commodities and the need to keep trade more local has benefitted its value. Improvements to the COVID situation in Latin America have also boosted MXN, which has seen a jump in demand as tourism and travel pick up in the hemisphere.
We expect the central bank to also have room to hike interest rates at their next meeting on March 24th. Any changes in stance will be a surprise, but we feel Peso is headed towards its early year levels for the remainder of the month.
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