- Euro and Pound Both Higher on Peace Talks
- Dollar Losses Some Strength
- Stocks Boosted by Agreement Potential
Both the Euro and Pound forex market are benefiting today from seemingly positive developments in peace talks between Russia and Ukraine. Hopes of a ceasefire and diplomatic solution have seen both currencies rally higher and meanwhile remove some of the resounding strength from the US Dollar which has in turn fallen back slightly. The US Dollar Index still remains very strong close to 99.00 but there is a more positive mood taking hold. At the same time, stocks on Wall Street have felt the same positive boost. The Dow Jones and other major indices have moved higher in the pre-market and are looking toward a positive day.
Talks Work to Bolster Both Euro and Pound
High-level peace talks between Russia and Ukraine have been taking place today in Turkey. Little had been expected with both sides going into the talks downplaying the chances of progress. That seems to have shifted though with reports emerging of more constructive dialogue than had been expected. As a result, those forex trading both the Pound and Euro have seen them rise back to recent highs.
The Euro has moved to a 10-day high above 1.11 against the Dollar amid hopes of a ceasefire. The fact that Russia appears to have agreed to cut the number of troops operating near the Ukrainian capital Kyiv has also positively impacted the Pound with the currency moving closer to 1.32. The fact that the Bank of England remains cautious on economic outlook though may cap the upside for Sterling at the moment.
Dollar Moves Back Slightly but Stays in Control
The Dollar has been enjoying a period of prolonged strength as uncertainty over Fed interest rate hikes, then the Russian invasion of Ukraine prompted investors to flock to the safe-haven currency with forex brokers. With geopolitics taking a more positive turn, and the Fed policy becoming clearer, the greenback has reversed a little.
It still remains extremely strong in the context of recent times, the US Dollar Index approaching 99.00, but it is a sign of light for other major forex currencies that traders are starting to venture away from the Dollar and toward more risk.
Stocks also Follow Positive Feeling
Early trading on Tuesday has all three of the major indices in the US gaining ground, much of it stemming from the same unexpectedly positive developments at the day's peace talks in Turkey. It has been a better period for Wall Street since the Fed finally announced its first rate hike and began to clear the uncertainty surrounding it.
At the time of writing, the Dow Jones was up almost 300 points with the S&P 500 showcasing similar gains in the early part of the day to add close to 1%. The Nasdaq also gained strongly with a 1.2% increase as oil prices dropped almost 5% on the day.