This is what you need to know to trade today monday march 21:
The US dollar remains firm, as the market has become risk averse on Monday amid the protracted war between Russia and Ukraine. The escalation of the conflict sank investor confidence after Ukraine refused to give up the beleaguered southern port city of Mariupol, while Russia warned of a humanitarian “catastrophe”.
As the crisis intensifies, a bucket of cold water is being poured on the hopes for a diplomatic solution seen over the past week. Investors also appreciate aggressive comments from Fed officials amid fallout from the call between US President Joe Biden and Chinese President Xi Jinping. President Biden warned China of consequences if it supported the Russian invasion of Ukraine.
Meanwhile, the markets were also disappointed after the People’s Bank of China (PBoC) to refrain from cutting lending rates mortgages, leaving them unchanged in the first quarter of this year.
Rising tensions around the Ukraine crisis reactivated the rebound in oil prices, while the European Union (EU) studies whether to impose an oil embargo on Russia. EU leaders and Biden are scheduled to meet on Monday to reaffirm the West’s response to Moscow.
Investors are now waiting for speeches by the ECB president, Christine Lagardeand the chairman of the Fed, Jerome Powelllater in the day, in the absence of top-tier economic news on both sides of the Atlantic.
At the start of the European session, S&P 500 futures are down 0.34% on the day, indicating a risk-off market profile, while the DXY US Dollar Index is up 0.10% so far, trading around the level of 98.35.
The EUR/USD Loses its recovery momentum and returns to negative below 1.1050 courtesy of US dollar strength fueled by risk aversion money flows and stabilizing Treasury yields. The common currency ignores aggressive comments from ECB policy maker Robert Holzmann as he advocated for a rate hike.
The GBP/USD extends its correction from one-week highs, now pressured around 1.3150. The BoE raised key rates by 25 basis points but showed hesitation on its future tightening plans. Rising inflation continues to threaten economic growth. The focus this week will be on UK retail sales and inflation data.
The USD/JPY consolidates just below six-year highs of 119.41 hit last Friday, as Fed-BoJ monetary policy divergence plays its part. The Japanese central bank left its monetary policy settings unchanged once again at its March meeting.
The gold finds support from renewed geopolitical concerns, although attempts to the upside could be capped below the 21-day SMA at $1,941 amid a firmer dollar.
After the recovery movement of the previous week, the Bitcoin has pulled back slightly, now trading around $41,000. The ethereum it lacks a clear directional bias around $2,850.
Source: Fx Street
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