Euro, Pound Fall; U.S. Dollar Climbs Amid Global Growth Worries
02 Marzo 2022 - 06:12AM
RTTF2
The euro and the pound weakened against their major counterparts
in the early European session on Wednesday, while the U.S. dollar
appreciated, as geopolitical tensions intensified in Eastern Europe
and oil prices surged in the wake of aggressive sanctions imposed
on Russia by the U.S. and Western countries.
Brent oil climbed above $110 a barrel ahead of a meeting of the
OPEC and its allies to discuss monthly oil output amid the
Russia-Ukraine conflict.
In the State of the Union speech, President Joe Biden said that
Russian planes have been banned from the U.S. airspace in
retaliation for the attacks on Ukraine.
On Tuesday, Russia warned of high-precision strikes in Kyiv and
told Ukrainian citizens to leave their homes.
Russian forces intensified their attacks on urban areas,
bombarding a TV tower near central Kyiv and the central square in
Kharkiv.
Investors reduced expectations for a 50 basis point hike at the
March 16 Fed meeting, but a 25 basis point move is priced in.
Federal funds futures markets now assign only a 5 percent chance
of a 50 basis point hike at the upcoming Fed meeting.
Market participants await Fed Chair Jerome Powell's testimony
before the U.S. Congress on Wednesday and Thursday for more clarity
on interest rates.
The euro depreciated to 1.1084 against the greenback, a level
unseen since May 2020. The currency may locate support around the
1.08 mark.
The euro fell to 1.0193 against the franc, registering over a
7-year low. If the euro falls further, 0.99 is likely seen as its
next downside target level.
The euro edged down to 127.61 against the yen and 1.4094 against
the loonie, off its early highs of 128.09 and 1.4180, respectively.
The euro is poised to challenge support around 125.00 against the
yen and 1.39 against the loonie.
The euro declined to near a 1-year low of 1.5275 against the
aussie and more than a 3-month low of 1.6376 against the kiwi, down
from its prior highs of 1.5342 and 1.6476, respectively. The euro
is seen facing support around 1.49 against the aussie and 1.58
against the kiwi.
Reversing from an early high of 0.8360 against the pound, the
euro dropped to 0.8329. Should the euro slides further, 0.80 is
likely seen as its next support level.
The pound weakened to more than 2-month lows of 1.3271 against
the greenback and 1.2206 against the franc, following its prior
highs of 1.3339 and 1.2262, respectively. The currency is likely to
find support around 1.30 against the greenback and 1.19 against the
franc.
The pound retreated from an Asian session's high of 153.44
against the yen and slipped to 152.81. Next likely support for the
currency is seen around the 150.00 level.
The greenback appreciated to 0.9206 against the franc and 115.27
against the yen, from its early lows of 0.9179 and 114.79,
respectively. Next key resistance for the greenback is seen near
0.94 against the franc and 118.00 against the yen.
The greenback rebounded to 0.7243 against the aussie and 0.6753
against the kiwi, from its previous session's lows of 0.7283 and
0.6783, respectively. The next possible resistance for the
greenback is seen around 0.70 against the aussie and 0.64 against
the kiwi.
The greenback, meanwhile, pulled back against the loonie and was
trading at 1.2712. On the downside, 1.25 is possibly seen as its
next support level.
Looking ahead, Eurozone inflation for February will be published
in the European session.
U.S. ADP private payrolls data for February is scheduled for
release at 8:15 am ET.
At 10 am ET, Federal Reserve Chair Jerome Powell will testify on
the semi-annual monetary policy report before the House Financial
Services Committee in Washington DC.
At the same time, the Bank of Canada will announce its interest
rate decision. The BoC is widely expected to raise interest rate to
0.5 percent from 0.25 percent. The Fed Beige book report will be
released in the New York session.
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