Euro Makes 'Surprise', What Will Be The Focus Of 'Traders' After The FOMC?

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 The Euro continued to strengthen on Thursday with investors now shifting their focus to developments in talks between Russia and Ukraine. At the same time the Fed’s decision to raise interest rates did not much affect the market.


The Kremlin noted that Russia is determined to make these talks a success which is seen to lead to the possibility of a peace deal with Ukraine. Meanwhile, Ukrainian President Volodymyr Zelenskiy did not change his stance that Ukraine's international borders must be recognized, an adviser said.


The Euro strengthened 0.52% against the US dollar to a trading level of 1.1090. According to analysts Commerzbank that what is important for the foreign exchange market is whether the likelihood of an energy crisis is reduced or not as it gives to inflation and currency exchange.



The Russian ruble was down 16% to 105.18 against the U.S. dollar after hitting its highest level since Feb. 24 at 88.5 on Wednesday. On the other hand, the Fed began its tightening of monetary policy with a quarterly rate hike on Thursday, while new projections show policymakers are ready to exert all forces in the fight against inflation.


“Given the very hawkish FOMC meeting, yesterday’s market reaction was not very impressive, indicating that investors are already setting prices in their expectations” Unicredit analysts said.


The US dollar index, which measures the US dollar against six major currencies, traded down 0.54% to 98.985. The yen depreciated 0.1% to 118.63, to its lowest level since February 2016.


The 2% target set by the Japanese central bank is seen as unlikely to be achieved due to rising energy costs. The pound weakened against the euro and the US dollar after the Bank of England raised interest rates as expected, but was moderate on the need for further increases.

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