Dollar Forex Market Benefits From Risk Aversion

• EUR/USD Hits New Weekly Low
• US PMI Data Due Amid Geopolitical Concern
• Stocks Continue to Tumble 

The US Dollar forex market is holding up well against pressure on multiple fronts in the early part of this week. The main focus is on the rising geopolitical situation as Russia seemingly continues to press ahead with its agenda in Ukraine. This has seen oil prices rise sharply and traders move their positions toward the traditional safe-haven US Dollar. As a consequence, both the Euro and Pound have moved lower with the former touching a new weekly low. On Wall Street, stock prices continue to fall as concerns mount over what will happen next in Eastern Europe.

EUR/USD Moves Lower Before Rebounding

Those trading the EUR/USD during the early hours and the Asian trading session will have seen that the pair hit a new low for the week falling below 1.13. This move comes as traders moved with caution ahead of any more news or developments from Russia. The pair has managed to recover early in the European session and recapture the 1.13 level.  

The sentiment still very much remains in favor of the Dollar though and the day if not week ahead for the currency seems as though it will be defined by what happens in the news. The Pound is also trading slightly lower today as UK PM Boris Johnson led an early morning meeting and is expected to deliver a statement just before lunch today but has already said there will be a “barrage of UK economic sanctions against Russia” on the way.

US PMI and Consumer Confidence Data to Come 

In a day that will be dominated by the political news, forex brokers in the US will also be looking toward Markit preliminary PMIs that are due later in the American session. These alongside data from the Conference Board Consumer Confidence Index will be studied by analysts with rising inflation still a major concern. 

On another day, these numbers may well be the key point of focus for an economy that has recently been extremely concerned with inflation indicators and consumer confidence. Today, however, these figures are not expected to have an impact on the Dollar where continuing strength is expected as the geopolitical concerns show few signs of disappearing.

Wall Street Rocked by Uncertainty

Even prior to the Russia-Ukraine crisis, Wall Street had been enduring some difficult weeks. The start of the year has been tough for the street and seen averages drop sharply almost across the board. The early hours trading had the Dow Jones down more than 500 points from yesterday's close at its lowest point. 

These losses seem to have rebounded and the markets look set to open not far from where they closed on Monday. Oil prices meanwhile rose sharply with the latest news sending prices above $95 a barrel. Traders will also be keeping a close watch on the Federal Reserve with tighter monetary policy set to have an impact.