In Hopes of Progress in Ukraine Peace Talks, the Euro Jumps to a One-week High | Latest Update!


March 17- The euro rose on Thursday on prospects of progress in Russia-Ukraine talks, while the Federal Reserve’s decision to hike rates and aggressively combat inflation failed to sway the market since the bar for a hawkish surprise remained high.

According to new Fed predictions, officials are set to kick their inflation fight into high gear, with the federal funds rate expected to rise to a range of 1.75 percent to 2 percent by the end of 2022. find out more

“Given the FOMC’s hawkish tone, yesterday’s market reaction was underwhelming, indicating that investors were already pricing in a very aggressive hike cycle,” Unicredit analysts said.

The dollar index, which measures the currency’s strength versus six other currencies, dropped 0.3 percent.

“The US forward curve has already integrated a considerable degree of tightening before the FOMC meeting,” they noted, “which could restrict the strength of further USD appreciation.”

Despite the ongoing warfare between Russia and Ukraine, both sides have stated that peace talks are progressing. For the fourth day in a row, Moscow stated, videolink negotiations resumed on Thursday, covering military, political, and humanitarian matters. find out more

In Hopes of Progress in Ukraine Peace Talks, the Euro Jumps to a One-week High (1)
In Hopes of Progress in Ukraine Peace Talks, the Euro Jumps to a One-week High | Latest Update!

The euro rose 0.3 percent to $1.167, a one-week high.

“What matters for the foreign exchange market is whether the likelihood of an energy crisis lowers,” according to Commerzbank analysts. “An energy crisis would be inflationary and relevant to the exchange rate for many reasons.”

“It’s possible that a fragile peace would only help modestly in this regard,” they added.

The yen sank 0.1 percent to 118.67, close to its lowest level since February 2016, when it hit 119.12 on Wednesday after the Bank of Japan (BoJ) ruled out tightening monetary policy.

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Even with growing energy costs, Japan’s inflation is unlikely to reach the 2% target, according to Bank of Japan Governor Haruhiko Kuroda, who argues for keeping monetary policy ultra-loose at the central bank’s policy meeting on Friday. find out more

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While investors await the result of the Bank of England policy meeting, the pound is rising against the euro and the dollar, with money markets pricing in a 70 percent chance of a 50 basis point rate hike. APR

After employment surpassed estimates in February, the Australian currency surged 0.5 percent to 0.7328 against the greenback, as activity recovered unexpectedly swiftly following an Omicron epidemic.

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