Euro Rose on Wednesday Thanks to Lavrov’s Comment

Euro Rose on Wednesday Thanks to Lavrov’s Comment

The euro strengthened its positions on Wednesday, set for its third consecutive day of gains, after the Russian Foreign Minister said peace talks with Ukraine were not easy but there was hope for compromise.

On a busy day for markets, the single currency, as well as the Chinese yuan, overshadowed the dollar index. The index declined ahead of a Federal Reserve policy announcement with market expecting the Federal Reserve to increase interest rates for the first time in several years.

The euro gained 0.4% to $1.0005 by 12:30 GMT. The single currency rose after Sergei Lavrov said that some deals with Ukraine were close to being agreed, with neutral status for Kyiv under “serious consideration”.

According to Volodymyr Zelenskiy, the talks were sounding more realistic but more time was needed. 

Euro and Ukraine 

Information regarding Ukraine helped to boost the euro and other European currencies. The Swedish and Norwegian crowns found some support from negotiations. 

The Swedish crown was on track for its best week against the euro since May 2020. The local currency gained 1% to a five-week high of 10.4275 after Riksbank Governor Stefan Ingves said a rate hike may come sooner than 2024 as initially planned, amid surging inflation.

The British pound gained 0.4% to $1.3091, ticking up from Tuesday’s 16-month low of $1.3000. Money markets expect the Bank of England to hike rates by another quarter-point on Thursday. 

The Norwegian crown added 1.3% against the U.S. dollar to 8.9040. 

The Australian dollar rose 0.8% to $0.72495. 

In the meantime, the dollar index which tracks the U.S. currency against a basket of currencies dropped 0.33% to 98.604.

The U.S. dollar stood at 118.315 yen. One day earlier, the U.S. dollar jumped to 118.450 for the first time since January 2017.