Australian Dollar (AUD) Dented by Russia-Ukraine Tension
The Australian Dollar (AUD) sank at the beginning of Monday’s European session as fears of a Russian invasion of Ukraine mounted, encouraging a risk-off mood.
Later in the day, however, Russian Foreign Minister Sergey Lavrov told Russian President Vladimir Putin that the US had put forward concrete proposals on reducing military risks. The news helped to stabilise markets.
Into today, the Reserve Bank of Australia (RBA) will publish its meeting minutes – if they echo the dovish tone struck by Governor Philip Lowe’s last week, the ‘Aussie’ could face headwinds.
Pound (GBP) Gains Capped by Brexit Concerns
The Pound (GBP) found limited support yesterday as Brexit headwinds weighed upon the currency.
Disagreements over the Northern Ireland protocol seemed further than ever from being resolved, as DUP leader Sir Jeffrey Donaldson remarked that ‘very little progress’ was being made. UK Prime Minister Boris Johnson put the chances of a new deal being achieved this month at below 30%.
Employment data is likely to drive Sterling exchange rates today. Unemployment is expected to remained unchanged, but a slowing of wage growth could dent GBP exchange rates.
Euro (EUR) Dented by Fears of War in Europe
The Euro (EUR) fell against the majority of its peers at the beginning of the week, as the prospect of a war in Eastern Europe saw investors shy away from the currency.
Also weighing upon the single currency was dovish rhetoric from the European Central Bank (ECB). Governing Council Member Olli Rehn remarked that ‘overreaction to inflation by the central bank could stem economic growth.’
Germany’s ZEW economic sentiment index could influence trading today – sentiment is expected to rise to 55 from 51.7 in January, which could boost the Euro.
US Dollar (USD) Climbs on Safe-Haven Tailwinds
The US Dollar (USD) rose through yesterday’s session, as the currency’s safe-haven status acted as a tailwind in the face of tensions between Russia and Ukraine.
Despite easing fears of conflict through the course of the day, the stakes remained high for the US and other major players; political tensions elsewhere kept market sentiment low, benefitting risk-off currencies.
Looking ahead, today’s Empire State manufacturing index may lend USD support, as NY manufacturing activity looks to have risen to 12.15 in February.
Canadian Dollar (CAD) Firms on Rising Oil Prices
The Canadian Dollar (CAD) climbed on Monday despite a risk-off mood, as oil prices increased. Traders anticipated that a Russian invasion of Ukraine may disrupt energy exports, leading to the sudden spike in WTI costs.
New Zealand Dollar (NZD) Tumbles on Lack of Data
The New Zealand Dollar (NZD) sank against its rivals at the beginning of the week, as a risk-off mood prevailed and a lack of New Zealand data exposed the currency to losses.
Data Releases
Feb 15th 10:30 AUD RBA Meeting Minutes N/A
Feb 15th 17:00 GBP Unemployment Rate (Dec) 4.1%
Feb 15th 17:00 GBP Average Earnings incl. bonus (Dec) 3.8%
Feb 15th 20:00 EUR Balance of Trade (Dec) €-3.2B
Feb 15th 20:00 EUR Employment Change Prelim (Q4) 0.3%
Feb 15th 20:00 EUR GDP Growth Rate 2nd est. (Q4) 0.3%
Feb 15th 20:00 EUR ZEW Economic Sentiment Index (Feb) 49.6
Feb 15th 20:00 EUR German ZEW Economic Sentiment Index (Feb) 55
Feb 15th 23:30 USD NY Empire State Manufacturing Index (Feb) 12.15
Feb 15th 23:30 USD PPI (Jan) 9.1%