What you should know on Wednesday, February 16:
Market sentiment improved on Tuesday as market players rushed to price in declining tensions between Russia and Ukraine after the Russian Defense Minister announced that some of the troops on the border would return to their bases. .
However, Russian President Vladimir Putin’s comments published during the American afternoon were not so encouraging. Putin said he is not satisfied with assurances that Ukraine will not become a NATO member in the near future and wants the issue resolved now or soon through a negotiation process.
In addition, German Chancellor Olaf Scholz is in Moscow for diplomatic talks. A key gas line from Russia to Germany may go offline in the event of war. Finally, UK Prime Minister Boris Johnson noted that Russia is giving mixed signals and continues to prepare to respond to a Russian invasion.
Financial markets maintained an upbeat tone throughout the European and American sessions, with indices on both continents posting substantial gains. Wall Street, however, pulled back from intraday highs before the close.
Dollar demand eased, but its decline was partially offset by renewed strength in government bond yields. The 10-year US Treasury bond rose as much as 2.05% on Tuesday.
The EUR/USD pair settled at the 1.1350 zone, while the GBP/USD hovers around 1.3540. The AUD/USD pair rallied to 0.7150, while USD/CAD is trading at the 1.2730 price zone.
Commodities gave up and gold tumbled to the current $1,850 zone. Crude oil prices have shed much of their recent gains, with WTI currently trading around $91.60 per barrel.
The focus now shifts to US Retail Sales and the FOMC Meeting Minutes.
Source: Fx Street
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