US dollar fueled by a rise in safe-haven flows as worries about the conflict between Russia and Ukraine grow.
US dollar (USD) to enter a choppy trading pattern as headlines about Russian President Vladimir Putin signing a decree that permits the use of nuclear weapons against a non-nuclear state if it backed by nuclear powers. Since the US allowed Kyiv to use long-range missiles, the action widely viewed as a direct threat to Ukraine to strike Russian military targets.
US stocks are plummeting as tensions rise, and significant inflows are occurring into safe haven currencies like the USD.
US stocks are plummeting as tensions rise, and significant inflows are occurring into safe haven currencies like the USD, Swiss franc (CHF), and Japanese yen (JPY). The action is a reflexive response to Monday’s risk-on market close.
Moreover Tuesday’s US housing data, including the Building Permits and Housing Starts data, will dominate the US economic calendar. Given the current pattern, it is anticipated that the data will indicate a general stabilization of the housing market.
Daily Market update: Geopolitics exerts pressure on US dollar.
Markets are reacting impulsively to headlines about Russia. A decree signed by Russian President Vladimir Putin permits the full use of nuclear weapons against any non-nuclear country that targets targets on Russian territory, according to Bloomberg. This essentially means that Russia will have the ability to use nuclear weapons in retaliation once Ukraine launches long-distance missiles from the US or the UK.
Furthermore According to Bloomberg, which cites local sources, Ukraine launched its first ATACMS strike inside Russia.
US housing data for October will be made public at 13:30 GMT:
It anticipated that the number of building permits will slightly increase from the previous 1.425 million to 1.43 million.
It anticipated that housing starts will drop from 1.354 million units in September to 1.34 million units.
Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, speaks at a gathering hosted by the Greater Omaha Chamber in La Vista.
Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, speaks at a gathering hosted by the Greater Omaha Chamber in La Vista, Nebraska, regarding the outlook for US economic and monetary policy GMT 18:10.
Following remarks made about President Putin signing the nuclear weapons decree, stocks are plunging. European stocks are losing all of their gains and falling by almost 0.50%. The losses on US equity futures have decreased.
A further 25 basis point (bps) rate cut by the Fed at its December 18 meeting priced in by 58.4% in the CME FedWatch Tool. Rates have a 41.6% chance of staying the same. Traders have drastically reduced some of their rate-cut bets compared to a week ago, even though the rate-cut scenario is the most likely.
The US 10-year benchmark rate is currently trading at 4.38%, further depreciating from Friday’s high of 4.50%.
https://voiceoftraders.com/analysis/pound-sterling-declines-ahead-of-the-mpc-hearings
