EUR/USD collapses to monthly lows in the sub-1.1200 area.The selling pressure around the single currency (and the risk complex in general) picked up extra pace and dragged EUR/USD to the area below the 1.1200 yardstick on Thursday.EUR/USD weaker on Russian invasion, safe haven demand.EUR/USD adds to Wednesday’s pullback and starts the second half of the week deeply in negative territory following heightened demand for the greenback – all in response to broad-based rise in flows coming into the safe haven universe.
As a result, the safe-haven greenback gathered extra steam after Russia set in motion its invasion of Ukraine early on Thursday, putting the risk complex under strong downside pressure and bolstering the demand for the safer assets like the dollar, yen, Swiss franc and bonds.
Money markets on both sides of the ocean showed renewed buying interest, which depressed US 10y yields to the sub-1.90% area and dragged German 10y Bund yields below 0.15%.
EUR/USD continues to look to geopolitical developments and risk appetite trends for near-term direction. The recent deterioration in the Russia-Ukraine situation is expected to keep the pair under pressure amidst solid risk-off sentiment. In the meantime, bouts of strength in the pair should remain underpinned by speculation of a potential interest rate hike by the ECB probably sooner than many anticipate, higher German yields, persevering elevated inflation and a decent pace of the economic activity, as well as auspicious results from key fundamentals in the region. The threat to this view, as usual, comes from the Fed and a potential tighter-than-expected start of the normalization of its monetary conditions.
EUR/USD recovers to 1.1250 amid Russia-Ukraine tensions.EUR/USD is recovering towards 1.1250, as markets take a pause and digest the latest developments after the Russian military attacked Ukraine. The risk-off market profile will continue to persist, with the Western response eagerly awaited alongside the G7 meeting.
EUR/USD News.GBP/USD battles 1.3500 as Russia-Ukraine war kicks off.GBP/USD is trading around 1.3500, having fallen like a house of cards after Russia’s assault on Ukraine. The official announcement of Russia’s invasion of Ukraine by NATO pushed the US dollar higher. Investors are dumping risk-perceived assets on heightening the war-like situation in Eastern Ukraine.