What you should know on Wednesday, March 16:
The dollar started the day a foot behind, but managed to regain lost ground during US trading hours. EUR/USD is trading around 1.0940, while GBP/USD is trading at 1.3035.
President Vladimir Putin said that kyiv is not serious about finding a mutually acceptable solution. The news dampened hopes of a diplomatic settlement. Earlier in the day, adviser to the Ukrainian president, Volodymyr Zelenskyy, said he was confident a diplomatic solution could be reached in the coming weeks.
Beyond the sanctions, Russia submitted an application to leave the Council of Europe after being suspended on February 25. In addition, Moscow announced a series of sanctions on US authorities, including President Joe Biden, and banned Canadian Prime Minister Justin Trudeau from entering the country.
European Central Bank President Christine Lagarde speaking at the WELT Economic Summit, noting that uncertainty around the economic outlook had risen sharply, as the war would reduce growth and lead to inflation due to rising energy costs. and the raw materials. She also said inflation is still expected to gradually ease and settle close to the central bank’s 2% target for 2024.
China announced a record number of coronavirus infections and put more than 17 million people in a strict lockdown, lowering expectations for economic growth. Stocks and commodities retreated amid concerns about falling demand during the first half of the day.
Gold bottomed at $1,907.04 a troy ounce, bouncing modestly before the close to settle around $1,920 a troy ounce. Crude prices extended their latest decline and WTI ended the day at $96.50 a barrel.
The AUD/USD pair spent the day in a tight range, ending little changed below 0.7200. The Canadian dollar benefited from falling oil prices and rising commodity prices, causing USD/CAD to drop to 1.2766.
Wall Street posted substantial gains despite growing concerns over the Russia-Ukraine crisis. US government bond yields rose, with the 10-year Treasury note yield hitting a multi-week high of 2,169% and ending the day close.
Market focus now shifts to the Federal Reserve as the US central bank will announce its monetary policy decision on Wednesday and is expected to trigger a rate hike of at least 25bps.
Source: Fx Street
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