This is what you need to know to trade today Wednesday February 16:
The positive change observed in the market sentiment due to the increase in hopes of a de-escalation of the conflict between Russia and Ukraine allowed risk flows to dominate financial markets on Tuesday. Investors, however, remain cautious early on Wednesday after US President Joe Biden signaled that a Russian attack on Ukraine remained a possibility. Later in the day, data from retail sales and industrial production for January will appear on the American economic calendar. Even more importart, The Federal Reserve will publish the minutes of its January monetary policy meeting at 19:00 GMT.
See: US January Retail Sales Preview: Geopolitics and FOMC minutes will move the dollar
See: FOMC Minutes Preview: Could the Fed’s Rate Agenda Be a Casualty of War?
Russian President Vladimir Putin said on Tuesday that Russia does not want to go to war with Europe and announced that the decision on a “partial withdrawal of troops” had been made. Later in the day, Putin said that they were not satisfied with the claim that Ukraine will not become a NATO member in the near future. However, Wall Street’s main indexes gained more than 1% on Tuesday and the yield on the 10-year US Treasury bond rose 3%. The DXY dollar index snapped a three-day winning streak before entering a consolidation phase near the 96.00 level early Wednesday.
earlier in the day, data from China has revealed that the CPI consumer price index decreased to 0.9% yoy in January from 1.5% seen in December. This reading was lower than 1% expectations, but failed to trigger a noticeable reaction in the market.
The EUR/USD capitalized on improving market sentiment and recovered to the 1.1350 region on Tuesday. The pair is trading sideways near that level at the start of today’s European session. Eurostat will publish December industrial production data later in the session.
The GBP/USD hangs on to modest daily gains above 1.3550. Data released by the ONS on Wednesday showed that UK CPI inflation rose 5.5% year-on-year in January, beating the market expectation of 5.4%.
The price of gold lost almost 1% and fell to the $1,850 area, pressured by rising US Treasury yields. The precious metal remains relatively quiet early on Wednesday as investors eye further developments surrounding the Ukraine-Russia conflict.
Despite the renewed weakness of the dollar, the USD/JPY managed to close in positive territory on Tuesday with the safe-haven Japanese yen struggling to find demand. The pair posts small daily gains above 115.50.
The Bitcoin got a boost from risk flows on Tuesday and was up almost 5% on the day. BTC/USD has modestly retraced around $44,000 early Wednesday. The ethereum It gained 9% and touched the $3,200 level before pulling back towards $3,100.
Source: Fx Street
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