Forex Top Team

Market risk alerts recede, one uncertainty disappears in Powell Congress testimony

As the situation in Ukraine became more serious, risk alert movements in the market have receded. Regarding the March FOMC meeting, the statement by FRB Chairman Jerome Powell about a 0.25% rate hike on the previous day dispelled market uncertainty over the rate hike. The possibility of a 0.5% rate hike was also mentioned, but this is unlikely in March.

In the NY market the day before, the yield on US bonds rose again along with the rise in stock prices. The dollar-yen pair has risen to the high 115-yen level, the pound-yen pair has risen to the 155-yen level, and the Australian dollar-yen pair has risen to the mid-84-yen level. The euro-yen has also remained firm, but it did not reach the 129-yen level and trading was mixed. As the situation in Ukraine deteriorates, selling pressure is strong as a currency that is geographically close. Euro selling is also predominant in cross transactions such as against the pound and against the Australian dollar.

The ceasefire talks between Ukraine and Russia, which were expected to be held yesterday, have been postponed to those expected to be held today. As the Russian army intensifies its attacks on Ukrainian cities, little compromise between the two can be expected. At present, it only shows the continuation of the ceasefire talks themselves. However, as far as the market movements are concerned, the panic risk aversion movement has subsided. If there is any progress in the ceasefire talks, it seems likely that there will be an optimistic reaction.

Although there is still selling pressure on the EUR, the inflation rate is high and it is difficult to move up or down, so it is assumed that there is a range trend.

The USD has been on the rise since the congressional testimony of FRB Chairman Powell the day before. It is assumed that this flow will continue.

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