The euro rose more than 1.5% against the dollar on Wednesday as risk appetite returned to the financial markets and energy and commodity prices fell from recent highs driven by Russia’s invasion of Ukraine and Western sanctions taken in response.
After reaching a 22-month low on Monday of $ 1.0806, the euro was last at $ 1.10645, up 1.57% on the day.
The move was partly driven by recent news that the European Union was discussing a joint bond issue to finance energy and defense spending, said Mazen Issa, TD Securities’ chief currency officer.
“Looking at the options market, it is a sign that the protection of the euro has declined, so it could be a sign that the market thinks we may be continuing from the very acute phase of the shock,” he said of the retail sector. currency response to the Ukraine crisis.
A month ago, the euro was close to touching $ 1.15 and its rapid drop below $ 1.10 could have been too much, said Joseph Trevisani, a senior analyst at FX Street.com.
“This is an extremely fast and steep movement and that’s why I think we’re seeing some profiteering and also some reversal based on that,” he said.
Against a basket of currencies including the euro, the dollar fell by 1.077% to 98,052, after reaching a 22-month high on Monday.
Markets also welcomed the contraction in commodity prices, which has contributed to higher inflation and increased uncertainty about economic growth expectations.
Oil prices have fallen in the media, with OPEC producers in the United Arab Emirates and Iraq saying they would support increased production, which could potentially offset some of the disruption to supply due to sanctions against Russian oil.
Brent crude fell more than 17% to a low of $ 105.60 in strong sales before reaching $ 114.69 a barrel.
U.S. crude oil fell 9.7 percent to $ 111.69.
The fall in oil prices also contributed to an increase in the main Wall Street stock indices, as investors picked up stocks that were worried about Western sanctions against Russia.
“There is certainly a risk in moving today in all markets,” said Trevisani.
European currencies such as the zloty in Poland and the Hungarian forint rose sharply, rising from a record low against the euro, also supported by both central bank interest rates on Tuesday.
The European Central Bank will meet on Thursday, but amid the stagnation of stagnation, money markets expect politicians to postpone interest rate hikes until late in the year. “European currencies have been under a lot of pressure over the past two weeks and some of these valuations are starting to look tense,” said Jane Foley, head of foreign exchange policy at Rabobank in London.
The pound sterling rose by 0.47% against the dollar to $ 1.3162, the zloty in Poland jumped 5.78% against the currency to 4.3145 and the Hungarian forint rose by 4.03% to 341.28.
In the United States, President Joe Biden signed an executive order on Wednesday requiring governments to assess the risks and benefits of creating a digital central bank dollar, as well as other cryptocurrencies, the White House said.
Analysts saw the long-awaited implementation order as a full recognition of the growing importance of cryptocurrencies, such as Bitcoin and Ether, and their potential consequences for the United States and international financial systems.
Bitcoin rose 8.71% to $ 42,130, on its way to its biggest gain since February 28, while the smaller peer Ether added 5.06% to $ 2,708, which is also the best day this month.
The euro rises as oil prices fall and investors take risks – SABC News
Source link The euro rises as oil prices fall and investors take risks – SABC News