EURUSD rebounds as safe haven demand eases
Wednesday 9 March, 2022
Daily Currency UpdateThe euro gained against the US dollar on Wednesday as demand for safe haven currencies eased slightly. Yesterday Ukraine's President Volodymyr Zelensky said he is no longer pressing for NATO membership for Ukraine and that he was open to a compromise on Donetsk and Luhansk, which would fulfill two of Russia’s four demands that could end the war. Russia also claimed that it will no longer seek regime in Kyiv. This helped to stabilize the mood in financial markets and boosted investors’ confidence – in turn driving investment away from safe-haven assets such as the US dollar and gold.
However, investors still remained broadly cautious about the long-term impact of the crisis. According to Bloomberg, the EU is discussing a plan to jointly issue bonds on potentially huge scales to finance energy and defense spending. The implications of such a bond would be widespread and could greatly help with the EU’s long term energy problems. EURUSD was up 1.55% trading at 1.1066 at the time of writing. The US Dollar Index was down 1.05% sitting at around 98.01 at the time of writing.
Key MoversCommodity prices remained volatile, which drove direction for currencies like the Australian dollar, New Zealand dollar and the Canadian dollar. Oil prices fell on Wednesday after a few days of sharp surges following news that the UK and the US have agreed to ban the import of Russian oil and gas, with the US going one step further and banning Russian LNG and coal as well. The Canadian dollar, largely considered a petrocurrency, decoupled from the price of oil over the last day. USDCAD was down 0.52% at 1.2816 at the time of writing.
GBPUSD has pushed up through the 1.31 handle again, caused in part by a more upbeat tone in equity markets. GBPUSD was up 0.49% trading around 1.3164. However, the pound still remains vulnerable against the dollar as the UK economy could be affected slightly longer term in the aftermath of the Russia-Ukraine crisis.
- EUR/USD: 1.0891 - 1.1082 ▲
- GBP/USD: 1.309 - 1.3183 ▲
- AUD/USD: 0.7266 - 0.7336 ▲
- USD/CAD: 1.2805 - 1.2894 ▼