Dollar Forex Market Benefits From Risk Aversion
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- EUR/USD Reached a New Low Within One Week
- US PMI Data Expected Amid Geopolitical Concerns
- Stocks Continue to Decline
The US Dollar forex market is standing firm against pressure on many fronts in the early part of this week. The main focus is on the rising geopolitical situation as Russia continues to push its agenda in Ukraine. This has seen oil prices rise sharply and traders shift their positions toward the traditionally safe US Dollar. As a result, both the Euro and the Pound have fallen to lower levels, with the former reaching a new low within a week. On Wall Street, stock prices continue to decline while concerns rise about what will happen next in Eastern Europe.
EUR/USD Reached a Lower Level Before Rebound
Traders handling EUR/USD in the early hours and the Asian trading session saw the pair hit a new one‑week low, dropping below 1.13. This movement occurred as traders moved cautiously ahead of any further news or developments from Russia. The pair managed to rebound in the early hours of the European session and retook the 1.13 level.
Sentiment remains in favor of the Dollar and the days or weeks ahead for the currency seem likely to be defined by what the news brings. The Pound continues to fall as UK PM Boris Johnson led a morning meeting and was expected to issue a statement before noon today but has already delivered a “barrage of economic sanctions by the UK against Russia” forthcoming.
US PMI and Consumer Confidence Data Are Coming
On a day set to be dominated by political news, US forex intermediaries will also release the Markit preliminary PMIs expected later in the US session. These, along with data from the Conference Board Consumer Confidence Index, will be examined by analysts amid rising inflation, a primary concern.
On another day, these numbers could become the main focus for an economy that has recently been extremely worried about inflation indicators and consumer confidence. However, for now these figures are not expected to impact the Dollar, where continued strength is anticipated while geopolitical concerns show no signs of abating.
Wall Street Affected by Corruption
Even before the Russia‑Ukraine crisis, Wall Street had already endured several tough weeks. The start of the year was difficult for the market and averages fell sharply across almost all sectors. In the early trading hours, the Dow Jones dropped more than 500 points from yesterday’s close to its lowest point.
These losses appear to have rebounded and the markets will open not far from where they ended on Monday. Oil prices have risen sharply as this news pushed prices above $95 per barrel. Traders will also be closely watching the Federal Reserve for tighter monetary policy that could have an impact.
