The U.S. Dollar finally lost momentum and currencies across the board have mounted a resurgence as investors take into account that all Russian sanctions are now priced-in to the market.
Overview
Although energy prices and Russia’s isolation could result in slower global economic growth, firms and individuals are bracing for inflation and adjusting.Things remain highly volatile and uncertain, especially now that Russia’s Vladimir Putin seems cornered. Many experts believe he now sees this as a war he cannot afford to lose considering the backlash it has caused from Western opposition. The endgame for Ukraine is looking more like an all-out attack indiscriminately on the country as the battle looks long and full of insurgency against Russia.Now the thinking is about the length of this incursion, which will definitely impact the economies of the U.S and Europe in particular for as long as it is disruptive to commerce. Companies of all sectors have pulled out of Russia and Fitch Ratings cut its credit while saying a bond default is “imminent.”
It is worth noting that Bitcoin and other crypto surged after it was announced that Treasury Secretary Janet Yellen had an impending U.S. overhaul of crypto oversight. We will also be reading and hearing a lot more about the worries that come with “Stagflation,” low growth while prices of all keep rising.
What to Watch Today…
- No major economic events are scheduled for today
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EUR
The Euro is appreciating and looking to overcome its weakest point since the Summer of 2020. Today’s 1.0%+ move is the first spike of such magnitude since the start of February when things looked Euro-friendly. Tomorrow, we will hear from the European Central Bank, and they are expected to assess the bank’s thinking about hiking interest rates this year.
The situation in Ukraine puts them in a situation in which it might be best to maintain the financial environment at ease, perhaps even discuss ways for aiding the Euro-zone while the conflict inflicts economic pain on the region. Swings are likely to continue with uncertainty over peace.
AUD
The Australian Dollar has slipped a bit but is now back on rising mode as the buck’s streak of strengthening has come to a halt. The insanity in commodities created an opportunity for Aussie to climb to its best levels against the greenback since November.
Today marked a day of overall losses for the buck, which at the time of writing accumulated quickly overnight to 1.0% per the Bloomberg Dollar Spot Index. Expect more volatility and a chance for wild moves as Russia’s resolve to take over Ukraine intensifies while their economy goes rogue.
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