IFX Market Report: Wednesday 9th March 2022

After a tough start to the week, Euro and Sterling this morning has been able to recover some of their earlier losses as demand for the US Dollar decreases. While investors are still cautious, safe-haven assets such as the Dollar have struggled to gain mid-week momentum as investors await further news on the Russia-Ukraine conflict for direction. Market participants became slightly more optimistic yesterday evening when several news outlets reported that Ukrainian President Volodymyr Zelensky said “he is no longer pressing for NATO membership”. Zelensky said that NATO “is afraid of controversial things, and confrontation with Russia”, adding that he does not want to be president of a “country which is begging something on its knees”. Zelensky went on to say that he is open to “compromise” on the status of two breakaway pro-Russian territories that Putin recognized as independent just before unleashing his invasion late February.

In an attempt to deprive Russia of revenue, President Joe Biden yesterday banned imports of Russian oil and gas to the United States. This move from the US “opens a new front in efforts to isolate Moscow from the global economy, following moves to impose sanctions on key Russian banks, top government officials and oligarchs, as well as its central bank”. President Biden claimed by cutting of Russian oil to the US the “American people will deal another powerful blow to Putin’s war machine”. This decision was also “matched by a UK phase-out of Russian oil imports, but the EU did not follow suit and instead unveiled a plan to cut Russian gas imports by two-thirds within a year”.

With risk-appetite improving, Cable this morning has been able to reclaim the 1.31 territory. Yesterday however, GBPUSD started the session at 1.3090 and finished at 1.3092.

GBPEUR also made a loss in Tuesday’s session. The pair opened at 1.2054 and closed at 1.2049. This morning GBPEUR trades just below the 1.20 mark.

EURUSD in contrast made minor gains on Tuesday. The pair started at 1.0860 and finished at 1.0881.

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