Forex Today: Russia-Ukraine peace talks not enough to trigger a relief rally

Eren Sengezer FXStreet

Here is what you need to know on Tuesday, March 1:

The positive shift witnessed in risk sentiment in the second half of the day on Monday remained short-lived with Russia ramping up its military presence in Ukraine. Investors remain cautious early Tuesday and the greenback holds its ground against its major rivals. Later in the day, inflation data from Germany and the ISM's February Manufacturing PMI from the US will be looked upon for fresh impetus. European Central Bank (ECB) president Christine Lagarde is also scheduled to deliver a speech at 1300 GMT. Additionally, the US Federal Reserve is expected to publish the opening remarks of FOMC Chairman Jerome Powell's testimony on Wednesday.

Following a long meeting on Monday, delegations from Russia and Ukraine have agreed to meet again for the second round of "peace talks," reviving hopes for a diplomatic solution to the crisis. Nevertheless, NBC News reported that US intelligence agencies have determined that Russian President Putin could "double down on violence" as he was frustrated with his military struggles in Ukraine. Other headlines on the war showed that a huge military convoy was moving toward Kyiv and Russia was planning to choke off supply routes to the capital city.

US stocks futures indexes trade flat in the early European session on Tuesday and the benchmark 10-year US Treasury bond yield is up more than 1% at 1.86%. The US Dollar Index is posting small daily gains but stays below 97.00.

Earlier in the day, the data from China revealed that the business activity in the manufacturing sector expanded in February after contracting in January with the Caixin Manufacturing PMI improving to 50.4 from 49.1. In the meantime, the Reserve Bank of Australia (RBA) left its policy rate unchanged at 0.1% as expected and the bank reiterated that the policy rate will not be increased until actual inflation is sustainably within the 2%-3% target range. AUD/USD is up modestly on the day at 0.7270.

EUR/USD staged a decisive rebound in the American trading hours on Monday and ended up closing the day in the positive territory at 1.1220. The pair is trading in a relatively tight range near 1.1200 early Tuesday.

GBP/USD stays relatively quiet above 1.3400 heading into the European session on Tuesday. The Bank of England will publish the Net Lending to Individuals data for January later in the day, which is likely to be ignored by market participants.

USD/JPY turned south late Monday and closed the first day of the week in the red. The pair is moving sideways around 115.00.

Gold came under heavy bearish pressure in the second half of the day on Monday as risk flows took control of markets. XAU/USD is consolidating Monday's losses, staying afloat above $1,900.

Bitcoin surged higher and gained more than 14% on Monday before steadying above $43,000 early Tuesday. Ethereum rose 11% on Monday and came within a touching distance of the critical $3,000 mark.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD remains cautious near 1.1760 ahead of US data

EUR/USD trades marginally on the defensive at the end of the week, hovering around the 1.1770-1.1760 band against the backdrop of an equally humble advance in the US Dollar. Meanwhile, investors gear up for the release of key US data later in the day, including PCE and GDP figures.

GBP/USD looks slightly bid near 1.3480, focus on US docket

The British Pound gathers some fresh steam on Friday, prompting GBP/USD to reverse four consecutive days of losses and revisit the 1.3480 zone. Cable’s decent bounce comes on the back of modest gains in the Greenback prior to the release of significant US data.

Gold extends the recovery past $5,000/oz, looks at US data

Gold prices advance for the third straight day on Friday, reaching new multi-day highs just north of the key $5,000 mark per troy ounce. The continuation of the precious metal’s uptick follows steady geopolitical effervescence in the Middle East, while traders eagerly await key US data releases.

US GDP growth expected to slow down significantly in Q4 after stellar Q3

The United States Bureau of Economic Analysis will publish the first preliminary estimate of the fourth-quarter Gross Domestic Product at 13:30 GMT. Analysts forecast the US economy to have expanded at a 3% annualized rate, slowing down from the 4.4% growth posted in the previous quarter.

Week ahead – Markets brace for heightened volatility as event risk dominates

Dollar strength dominates markets as risk appetite remains subdued. A Supreme Court ruling, geopolitics and Fed developments are in focus. Pivotal Nvidia earnings on Wednesday as investors question tech sector weakness.

Official Trump price approaches breakout with mixed signals from traders

Official Trump (TRUMP) is trading at $3.50 at the time of writing, approaching its upper consolidation range. A breakout from this range could open the door for an upside move. On-chain data shows market indecision, with balanced flows between bulls and bears, signaling a lack of clear directional bias.