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Dollar Strengthens as Investors Keep Focus on Geopolitics

This is what you need to know to trade today monday march 7:

The markets have started the new week with a tone of aversion to risk after the evolution of the weekend around the conflict between Russia and Ukraine. Safe-haven assets continue to find demand on Monday and major global stock indices suffer heavy losses. In the absence of high-level macroeconomic data releases, investors will be watching the third round of talks between the Russian and Ukrainian delegations.

The US dollar index DXY, which gained more than 2% last week, is trading at its highest level since May 2020 and continues to push higher towards 99.00. The benchmark 10-year US Treasury yield is losing more than 1% on the day near 1.7% and US stock index futures have fallen between 1.1% and 1.8%.

In a video statement on Sunday, the Ukrainian president Volodymyr Zelenskyy reiterated that sanctions against Russia were not enough. Russia announced that it will maintain a temporary ceasefire on Monday and open humanitarian corridors in the cities of Kiev, Mariupol, Kharkov and Sumy despite having ignored the ceasefire on Sunday.

In the meantime, Chinese data revealed that imports and exports increased by 15.5% and 16.3%, respectively, year-on-year in January.

Bloomberg reported that The United States was considering banning Russian oil imports even if the European allies refrained from doing the same. The prices of raw rose at the start of the Asian session and a barrel of West Texas Intermediate WTI is trading at its highest level since September 2008 at $125.60, rising more than 9% on the day. Since the beginning of the month, WTI is already up more than 30%. Meanwhile, the International Monetary Fund has warned that a further escalation of the conflict between Russia and Ukraine could cause devastating damage to the world economy.

The gold was shot at its highest level since August 2020 at $2,000 earlier in the day before entering a consolidation phase below $1,990 at the start of the European session.

The EUR/USD opened with a big bearish gap and fell towards 1.0800. Although the pair managed to stage a bounce, it trades deep into negative territory near 1.0870.

The GBP/USD hit a fresh 2022 low at 1.3185 but recoups much of its losses above 1.3200 in European morning.

The USD/JPY It struggles to find a direction and continues to move sideways around 115.00 as the JPY holds its ground as a safe haven.

The Bitcoin It broke below $40,000 on Friday and failed to stage a significant rally over the weekend. BTC/USD is posting small daily losses near $38,000. The ethereum lost over 4% on Sunday and continues to drop towards $2,500 early Monday.

Source: Fx Street

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