The euro is still under pressure and fell to 1% at the beginning of the day. EUR/USD has recovered and is currently trading at 0.1215, down 0.50%. There are no first-level measures in the current economic calendar.
Financial markets are still focused on Ukraine, where fierce fighting continues. Russian and Ukrainian officials meet on the Belarus-Ukraine border to discuss a ceasefire. If there is any positive event from the meeting, the risk appetite will return, and the U.S. dollar will fall. Investors have secured a haven dollar while the dollar remains elevated against significant currencies. U.S. Treasury revenues rose. The dollar index increased to 97.02, for a total of 0.42%.
Euro and Ukraine Crisis
U.S. data showed some strength over the weekend. The main release was Core PCE, the Fed’s preferred inflation rate. The January rate accelerated to 5.2% year-on-year; From 4.9% in December and above the 5.0% consensus. This was the highest rate since July 1982 and put additional pressure on the Fed; To raise rates by 50 basis points at the March meeting. However, this is not an average time, as uncertainty over the Ukraine crisis has reduced the probability of an increase of 50 bps. According to CME Fed Watch, the likelihood of increasing at 25-bit/s is 76%, and 50-bit/s is 24%.
Personal income and expenses exceeded expectations, as did UoM consumer sentiment. Long-term good orders increased by 1.6% in January; From 1.2% in December and above the 0.8% forecast. Despite a strong weekend, the markets were more geopolitical. The direction of the U.S. dollar this week will largely depend on the events of the Ukraine crisis.
