Here is what you need to know on Friday, March 18:
The greenback continued to weaken against its major rivals on Thursday but the negative shift in risk sentiment helped the currency shake off the selling pressure early Friday. January Trade Balance from the euro area and February Existing Home Sales data from the US will be featured in the economic docket but investors will remain focused on the headlines surrounding the Russia-Ukraine crisis.
Earlier in the week, headlines surrounding the Russia-Ukraine talks suggested that sides were moving closer to a peace agreement. On Thursday, however, Ukrainian and Russian officials noted there was no significant progress in negotiations. Meanwhile, a western official told Reuters that there still was a very big gap between the positions of Ukraine and Russia. On a more concerning note, ''Russia may be contemplating a chemical-weapons attack,'' US Secretary of State Antony Blinken said.
Reflecting the souring market mood, US stock index futures are down between 0.3% and 0.6% in the early European session. The US Dollar Index, which is down more than 1% on a weekly basis, stays relatively quiet near 98.00.
EUR/USD reached its highest level in more than two weeks at 1.1138 on Thursday but seems to have lost its bullish momentum on Friday. The pair is moving sideways below 1.1100 in the European morning.
The Bank of England (BOE) hiked its policy rate by 25 basis points as expected on Thursday but the GBP/USD lost more than 100 pips and fell below 1.3100. The policy statement revealed a cautious stance on future rate hikes and made it difficult for the British pound to find demand. Although the pair managed to erase a large portion of its daily losses in the second half of the day, it lost its momentum and went into a consolidation phase above 1.3150.
BOE Quick Analysis: GBP/USD buying opportunity? Three reasons see upside from here.
USD/JPY continues to fluctuate in a relatively narrow range below 119.00 after closing virtually unchanged on Thursday. In the early Asian session, the Bank of Japan (BOJ) announced that they left the monetary policy settings unchanged. Bank of Japan (BOJ) Governor Haruhiko Kuroda noted that it was too early to debate the specifics of how to exit the easy policy.
Gold stage a rebound on Thursday but failed to reclaim $1,950. Despite the risk-averse market environment, XAU/USD struggles to regain its traction and trades below $1,940 early Friday.
Following Wednesday's recovery, Bitcoin struggled to find direction on Thursday and closed the day unchanged. BTC/USD continues to trade in a tight channel above $40,000. Ethereum registered gains for the fourth straight day on Thursday but lost its momentum before testing $3,000.
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