The U.S. Dollar is dominating peers as the globe continues to ponder how much the conflict between Russia and Ukraine will escalate.
Overview
Stock exchanges are feeling the pain with the Nasdaq 100 Index down 17.0% from its record high, which was recently achieved.Meanwhile, Federal Reserve chairman Jerome Powell is testifying in Congress today and in his statements, he is explaining that March is an appropriate time to start hiking interest rates. At the moment, the buck is further extending its gains following a positive piece of labor data in the form of ADP Employment Change, which added 475K vs 375K expected in February. Additionally, the January figure was revised upward significantly after initially being a contraction, 509K vs. (-301K).Powell is also saying that the conflict overseas adds a new element of uncertainty to the economy. Supply shortages are causing commodities to rise in price greatly, with WTI already over $110/barrel and a commodity index surging by the most since 2009 to a new record. OPEC members agreed to an increase in production by adding 400K barrels per day.
What to Watch Today…
- No major economic events are scheduled for today
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EUR
The Euro remains trading at its weakest point since early June of 2020 based on the turmoil caused by the attack and invasion of Ukrainian territory. Leaders across the European Union are on high alert as they re-think their situation with Russia, a country that most members heavily rely on for energy resources.
Commodities are already climbing dramatically, which also adds to pressure on the European Central Bank to consider its strategy in combating the high prices. The shared currency has been hit with plenty of negative headlines, but it is possible that with all pessimism priced in, the Euro starts slowly getting away from its current nadir, especially if news turns better.
GBP
Pound Sterling is currently moving around its worst level against the buck since December 22nd as the global reaction to Russian aggression has benefited the greenback as a safe haven. Per the Bloomberg Dollar Spot Index, this is the strongest USD since January 28th.
One thing certainly impacted has been the yield on bonds, which witnessed the biggest fall in 10-year treasuries since the day of the Brexit referendum result in June 2016. We shall see how much more room the currency has to lose as central bankers are speculated to get away from tightening and their dot-plot.
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