Breaking: In a nod to Russia, Ukraine is reportedly no longer insisting on NATO membership - AFP

FXStreet Team FXStreet

In a nod to Russia, Ukraine is reportedly no longer insisting on NATO membership, reported AFP on Tuesday. France24 also subsequently reported a similar headline, though was referring to an interview conducted on Monday. Ukraine's aspirations to join NATO was a key reason why Russian President Vladimir Putin ordered an invasion of the country. Whether or not an offer not to join NATO meets Russia's conditions that Ukraine be "neutral" (after all, Ukraine still aspires to join the EU) is not yet clear.

To clarify, Russia's stated goals when it announced its "special military operation" (invasion) of Ukraine was to "demilitarise" and de-Nazify" the country. Russia's demands for Ukraine to meet if it wants a ceasefire to include a pledge to be "neutral". Given the damage already dealt to the Russian military as a result of the conflict and to the Russian economy by Western sanctions, strategists have argued that the incentive for the Russians to agree to a ceasefire is diminished.

A pledge not to join NATO might not be enough. Russia may want to see a puppet pro-Kremlin government installed and aspirations to join the EU dropped, as well as agreements to "demilitarisation" conditions fulfilled before agreeing to a ceasefire. Ukrainian President Volodymyr Zelensky has made it clear that such conditions are not acceptable.

Market Reaction

The latest headlines of Ukraine dropping demands to join NATO triggered a bout of risk-on as traders revise higher their expectations that there could be a ceasefire. Commodity prices like gold and oil pulled back a little while US equities and yields popped higher. In FX markets, the US dollar and other havens have been sustaining some losses.

Author

FXStreet Team

FXStreet

EUR/USD looks sidelined below 1.1600

EUR/USD remains on the back foot in the latter part of the NA session on Thursday, now attempting a consolidative theme in the sub-1.1600 region. A more cautious market mood, driven by the escalating conflict in the Middle East, together with broad-based strength in the US Dollar, is favouring the continuation of the leg lower in spot.

GBP/USD stays offered near 1.3340

GBP/USD fades Wednesday’s uptick and trades with decent losses in the 1.3340 zone in the latter part of Thursday’s session. Cable’s weakness, alongside the rest of the risk complex, follows the strong performance of the Greenback amid intense geopolitical jitters.

Gold: further weakness could challenge $5,000

Gold comes under fresh selling pressure on Thursday, slipping back below the $5,100 mark per troy ounce. Persistent strength in the US Dollar (USD) is preventing the yellow metal from building a meaningful recovery, even as markets remain risk-averse amid the deepening conflict in the Middle East.

Crypto Today: Bitcoin, Ethereum, XRP hold weekly gains despite US-Iran war

The cryptocurrency market is gaining strength on Thursday, building on Wednesday's upswing, which saw Bitcoin reach a weekly high above $74,000. Ethereum and Ripple are moderating their recent gains amid uncertainty stemming from the escalating war in the Middle East.

Two PMIs, two Chinas

China’s economic data are often treated with a degree of caution by global investors. The challenge is not necessarily that the numbers are incorrect, but that they can describe very different parts of a vast and complex economy. Nowhere is that more evident than in China’s PMIs.

Ripple tests recovery strength amid steady ETF inflows, growing retail interest

Ripple (XRP) continues to demonstrate notable resilience as the cryptocurrency market navigates the persistent war in the Middle East after the United States (US) and Israel attacked Iran on Saturday.