Investor risk aversion intensifies as conflict continues
Monday 7 March, 2022
Daily Currency UpdateTraditionally investors move towards safe haven assets during unstable geopolitical climates. As the tragic situation in Ukraine continues, safe-haven currencies like CHF, JPY and USD have strengthened and were the best performing currencies last week. European stocks also took a steep dive and oil prices surged to levels not seen in more than a decade. Ukraine called on Russia to agree to a ceasefire from Monday morning to allow Ukrainians to evacuate towards the western Ukrainian city of Lviv. Over the weekend it was confirmed that Visa, MasterCard, and AMEX are going to stop operations in Russia. With immediate effect, any card issued by a Russian bank will not work outside Russia. Should the global geopolitical situation remain volatile, commodity currencies and safe haven currencies could remain supported.
Key MoversThe Russia-Ukraine conflict continued to drive investors to safe-haven currencies amid risk-averse trading. A better than forecast rise for US non-farm payrolls figures also helped boost the US dollar. This caused the GBP/USD currency pair to fall. US non-farm payrolls rose to 678K in February, above a forecasted fall to 400K. The figures likely increased optimism in the US economic recovery and increased expectations for an interest rate hike from the US Federal Reserve. The US dollar has likely also been bolstered by an optimistic stance from the Federal Reserve. On Wednesday, Federal Reserve Chairman, Jerome Powell testified in front of congress, signalling that the central bank planned to press ahead with a March interest rate hike.
- GBP/USD: 1.3105 - 1.3185 ▼
- GBP/EUR: 1.2095 - 1.2175 ▲
- GBP/AUD: 1.7705 - 1.7825 ▼
- EUR/USD: 1.0805 - 1.0875 ▼