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Forex Market Safe Havens Improve as Russia Invades

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On Digital Assets - Russia Cryptocurrency
  • Flight to Safety Continues for Traders
  • US Jobless Claims Due as Focus Remains on Russia
  • Wall Street Futures Nosedive

The forex market and those trading have woken up to more movement on Thursday as Russia began its move into Ukraine overnight. This immediately strengthened the traditional safe-haven assets including the US Dollar, the Japanese Yen, and Gold. Oil prices have also spiked above $100 per barrel on the news. On a day where there will be intense focus on the geopolitical landscape and impact, US jobless claims, as well as home sales data for January, are due. The futures market on Wall Street has tumbled along with major markets around the world.

Traders Move to Traditionally Safe Assets

There had already been an overarching sense of caution from those in forex trading and beyond in the wider economy since the turn of the year. Inflation concerns alongside trying to live with COVID-19 had seen the US Dollar occupy a strong position that it has not looked like surrendering in recent months. This cautious movement only intensified further today.  

The US Dollar Index moved above 96.50 and beyond its highest level in a month early in the day. This has been matched by upward movement in all traditional safe-haven assets. Gold prices have pushed higher and so too have the Japanese Yen and Swiss Franc. The price of gold has exploded higher, moving above $1950 to its highest level in more than a year, while oil, a chief Russian export surged to more than $100 a barrel.

US Data Overshadowed by Latest News

With inflation continuing to run hot in the US economy and around the world, figures like weekly unemployment claims, and monthly home sales figures are of key importance for analysts. These will all be secondary today as the eyes of the world remain fixed on Russia and the global response to their move into Ukraine. 

This data is still important but is likely not to have the impact it typically would on a day, and week, where forex brokers are more likely to see markets moved by what is happening in the political news. There is also some question of how these developments may impact the Fed plans to raise interest rates. 

Stock Decline Gathers Pace

The stock market has had a torrid year to date. This trend is continuing with the news today. Major US indices along with those around the world are all down sharply in early hours trading. The Dow Jones has dropped more than 500 points while the NASDAQ and S&P 500 are also both down more than 2% in volatile trading. 

With a number of big names set to report both before and after the closing bell today, it remains to be seen if anything can improve the market mood. Certainly, there seems to be a closing window for any diplomatic solution, and prices may well remain at the mercy of any global response.

Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world. A keen trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.

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