The #IronFX Midday Commentary by Marshall Gittler: The dollar traded mixed against the other G10 currencies during the European morning Monday. It was higher against #JPY and #CHF, while it depreciated against #NZD, #AUD, #CAD and #NOK. It remained near its opening levels against #EUR, #GBP and #SEK. The safe-havens JPY, CHF and gold declined this morning as European stocks rallied on expectations that the West will impose only limited sanctions on Russia after Crimea’s vote to leave Ukraine and join Russia. The Russian #MICEX index was the biggest winner of the morning, up 3.6%. The short-term course of markets now depends on the outcome of today’s meeting of EU foreign ministers to decide on sanctions. The sanctions could be light at first, lulling the market into a false sense of security, but then intensified after Russia signs an accession treaty with the breakaway region. That event could force the West to impose harsher sanctions, which could escalate the tension and cause a sharp reassessment of risk in the market. AUD was among the winners as Westpac’s chief economist has dropped his prediction of further interest-rate cuts as the labor market improves. #CNY continued declining after the #PBOC decided to double the band for the currency to +/-2% from +/-1% in order to make the exchange rate more market based. The only indicator coming out this morning was Eurozone’s final #CPI for February. Euro-area inflation was revised down to 0.7% yoy in February, but as expected the common currency did not react on the news. This may keep alive the pressure on #ECB to take further action if needed, but I believe that the market pays more attention on the preliminary CPI data, which comes out a couple of days ahead of the ECB meeting. Join us for more daily #Forex news: bit.ly/1aqAsOw
Posted on: Mon, 17 Mar 2014 11:47:29 +0000
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