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Russia and Ukraine continue to hold headlines

Thursday 17 February, 2022

Daily Currency Update

Russia and Ukraine tensions are on the rise again after doubts have emerged over the withdrawing of Russian troops from Ukraine’s border, with a number of western countries, as well as NATO, warning that Russia’s military presence is growing. It has also been reported that Russian-backed rebels in eastern Ukraine accused government forces of shelling their territory with mortars, which is the type of event that could be used by Moscow to justify an invasion. After yesterday morning’s CPI data from the UK, all eyes turned to the US for the early evening meeting minutes from the Federal Open Market Committee. No surprises came from the meeting with the central bank confirming that they intend to begin raising interest rates to fight inflation but stated its decisions would be data-dependent and would be made on a meeting-by-meeting basis. Due to this collective news, the US dollar lost ground against both the GBP and EUR yesterday, but movement remained within recent ranges. GBP/USD twice made a break for 1.3600 yesterday, but neither time broke this big figure. EUR/USD made a push to break 1.1400 on Wednesday, but unsuccessfully.

Key Movers

The growing fears that Russia will invade Ukraine have hindered euro gains. Headlines from the border will likely continue to have a hold on euro movement, unless the ECB give further indications that they plan on raising interest rates to tackle inflation. Once again the euro failed to break 1.1400 against the US dollar and GBP/EUR trades on the higher range of recent movement, just under 1.2000.

Expected Ranges

  • GBP/USD: 1.3550 - 1.3610 ▼
  • GBP/EUR: 1.1920 - 1.1990 ▲
  • GBP/AUD: 1.8830 - 1.8960 ▲
  • EUR/USD: 1.1280 - 1.1390 ▼