Forex Today: A pitch of optimism helps high-yieldings to bounce, Dollar still King
|What you need to take care of on Friday, March 4:
Risk aversion kept leading the way on Thursday amid the war crisis undergoing in Eastern Europe. Russian stocks' market remains closed, but shares of EU companies with a Russian exposure plunged. Meanwhile, the country is at the brink of default amid the global sanctions. Nevertheless, attacks on Ukraine continued, and Russian President Vladimir Putin told his French counterpart Emmanuel Macron that the goals of Russia's operation in Ukraine would be achieved in any case.
Wall Street opened with substantial gains but quickly turned red amid concerns related not only to the war but also to an aggressive US Federal Reserve. In his second day before Congress, chief Jerome Powell said that policymakers are prepared to raise rates by more than 25 bps in upcoming meetings, further denting demand for high-yielding assets.
The mood improved, and stocks bounced, putting a halt to the dollar's rally, on news coming from Ukraine. Kyiv said it reached a tentative agreement with Russia to organize safe corridors to evacuate civilians. Under the agreement, a ceasefire would be observed where safe corridors are created. Also, the third round of talks has been announced for next week.
Meanwhile, Bank of Canada Governor Tiff Macklem noted that he would not rule out a 50-basis-point increase in the future, as there is plenty of room to boost interest rates this year.
The EUR/USD pair plummeted to 1.1032, its lowest since May 2020, amid demand for safety. The pair hovers around 1.1060 while heading into the daily close. GBP/USD trades in the 1.3350 area.
The aussie was among the best performers, as AUD/USD hit a fresh 2022 high of 0.7347, holding nearby ahead of the Asian opening. The USD/CAD pair edged higher and settled at around 1.2675, as crude oil prices finally gave up a bit.
Gold Prices edged marginally higher. Spot gold trades at around $1,933.00 a troy ounce, having spent the day within Wednesday's range. WTI peaked at $116.51 a barrel but currently trades at around $108.00.
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