The EUR/USD currency pair is presently holding onto the previous losses it incurred when it went down by 0.11% on intraday as it took rounds to 1.1050 in early European trading on Thursday morning. The leading pair recorded its biggest gain on a daily basis which it last had in 2016 at the close of business on Wednesday, as there were increasing hopes that the ongoing Russia-Ukraine war will soon achieve a ceasefire agreement.
EUR/USD price chart. Source TradingView
A mixed barrage of news and the market’s anxiety leading up to major expected events such as the European Central Bank monetary policy meeting, however, is keeping the traders on a sharp edge.
Ukraine is ready to give a lot of compromises, provided Russia also negotiates compromises on some of its demands. Ukraine has withdrawn its application to join NATO, and a humanitarian corridor has been opened, which underpinned the pair’s rise on Wednesday. However, Russia is not willing to concede anything on its demands, and it goes to join the United States accusation that Russia has resorted to the usage of biological and chemical weapons. This is beginning to have a weight on the currency pair of late.
More Detrimental Sanctions
Note that the European Union went along with the United Kingdom and the United States to impose new sanctions on Russia over the continued war in Ukraine.
While all these went on, the US Treasury bond yield could not extend its previous day’s win, then the S&P 500 futures equally struggled to keep up with the strong upward move on Wall Street. The US dollar index, on its part, printed a mild gain as stronger inflation rates expectations are keeping buyers more hopeful for the time being.
That said, the inflation measurement regarding the ten-year break-even inflation rate of the Federal Reserve in St. Louis had refreshed records up to 2.9% before it stepped back a bit to 2.84% at the close of business in the North American session.
Going forward, the European Central Bank will aid the market with a solid policy to help the EUR/USD rebound on the charts before fears of a 2020 low creep in, and it can’t be contained as a result of impending fears of stagnant inflation. There is already an increase in international oil prices along with a negative economic tone due to the raging war in Eastern Europe.
The American consumer price index for February is speculated to rise to 7.9% from the initial 7.5%. It will be part of Thursday’s market highlight as well as Russia-Ukraine talks in Ankara.