This is what you need to know to trade today Thursday February 17:
Markets remain cautious on Thursday as investors struggle to determine whether or not there will be a military conflict between Russia and Ukraine. US Treasury yields are down, the US dollar index is up, and US stock futures are down 0.3%-0.5%. Later in the day, the economic docket will present weekly US jobless claims and housing starts data, but market action is likely to continue to be driven by geopolitical headlines.
During Asian business hours, Sputnik News reported that Ukraine fired mortar shells and grenades at four locations in the Lugansk People’s Republic (LPR), prompting a new flight into safe-haven assets. Ukraine has already denied this claim.
Meanwhile, Mikk Marran, director general of the Estonian Foreign Intelligence Service, said on Thursday that they were witnessing Russian military units moving towards the Ukrainian border. On a similar note, US Secretary of State Antony Blinken told MSNBC that they have yet to see any pushback from Russian forces. On a positive note, the Russian Defense Ministry announced that 10 military convoys left Crimea after the military exercises, but this headline does not seem to be helping to improve the market mood.
On Wednesday night, the US Federal Reserve released the minutes of its January monetary policy meeting. The post showed that the majority of participants favored removing accommodative policy at a faster pace than currently expected if inflation does not come down as expected.
The EUR/USD rallied towards 1.1400 on Wednesday but ended up closing the day around 1.1370. After falling towards 1.1300 on risk aversion in the early hours of Thursday, the pair managed to bounce back to the 1.1350 area.
The GBP/USD remains under modest bearish pressure in European morning and trades below 1.3600. Russia said Wednesday that it will retaliate if the UK imposes new sanctions against Moscow over the conflict with Ukraine.
The USD/JPY is turning down and trading below 115.50, with the yen finding demand as a safe haven. Earlier in the day, data from Japan showed machinery orders rose 3.6% month-on-month in December, beating market expectations for a 1.8% decline by a wide margin.
The gold continues to react strongly to changes in risk sentiment. After dipping below $1,850, XAU/USD gained traction and closed decisively higher near $1,870 on Thursday. The pair continues to rise towards $1,880 early on Thursday.
Bitcoin posted modest losses on Wednesday and is trading in a tight range near $44,000 in European morning trading. ethereum is having a hard time recovering and is approaching $3,000 after closing in the red on Wednesday.
Source: Fx Street
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