- EUR/USD opens modest positive amid the positive sentiment in the market.
- The shared currency has dumped heavily on geopolitical tensions between Russia and Ukraine.
- The mega event of the Fed’s monetary policy will hold the nerves of investors.
The EUR/USD pair has witnessed a modestly positive opening on Monday amid a positive tone in the market as investors have digested the worst-case scenarios from the Russia-Ukraine war and risk-perceived currencies may get significant bids on value-buying.
The shared currency has remained most vulnerable to geopolitical tensions between the Kremlin and Kyiv. The Ukraine crisis has posed a threat of stagflation in the European economy. A rise in the oil prices has triggered the prices of food products and metals while the economic activities may get hurt on supply chain bottlenecks going forward.
The price action in the US dollar index (DXY) is a tad bearish on Monday as the statement from the U.S. Deputy Secretary of State Wendy Sherman on Sunday that Russia was showing signs of willingness to engage in substantive negotiations about ending a conflict has weakened the safe-haven appeal.
Well, this week is going to be dictated by the monetary policy action from the Federal Reserve (Fed). Fed chair Jerome Powell with his colleagues may not take the bullet this time and put forward a hawkish stance to curtail the soaring inflation. Last week’s US Consumer Price Index (CPI) print at 7.9% has spooked the investors as the recording pokes multi-decades high. The think tanks need to put a cap on the roaring inflation to pause any carnage further.
Meanwhile, investors will also focus on the Eurogroup meeting in which the Finance Ministers of each Member State of the euro area meet to discuss the economy and monetary framework on Tuesday.
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