Things to watch out for on Wednesday, February 22:
The US dollar emerged victorious in the currency market as risk aversion led the way. Markets’ attention remained focused on geopolitical tensions, as the conflict between the US and Russia escalated in the last 24 hours. The latest in this regard came from Secretary of State Antony Blinken, who stated that the United States suspects that China is considering providing medium military to Russia. Moscow responded by suspending its nuclear arms treaty with the United States and vowing to maintain its military actions in Ukraine.
Wall Street returned from the long weekend and followed in the negative wake of its foreign counterparts. US indices fell sharply, losing about 2% each. The decline was exacerbated by renewed concerns about price pressure following the release of the US S&P Global PMIs. The manufacturing and services index was better than expected. Even so, the official report noted that “companies continued to try to pass on increased input costs to customers through increases in producer prices.” Continuing inflationary pressures mean that the US Federal Reserve will stay on a tighter path for longer.
Annual inflation in Canada rose to 5.9% in January, up from 6.3% in December. Also, the Bank of Canada’s core CPI, which excludes food and energy price volatility, rose 5% annually from 5.4% in December.
The UK Prime Minister’s spokesman, Rishi Sunak, stated that the Prime Minister had stated unequivocally that there were still substantive issues to be resolved with the EU, putting back on the table the Brexit problems.
Beyond the US S&P global PMIs, the European ones were mixed, with the service sector expanding but manufacturing still in contraction mode. The UK figures, on the other hand, were quite encouraging.
The EUR/USD pair is trading around 1.0650, not far from an initial low of 1.0636. GBP/USD is trading around 1.2110, with the pound supported by some encouraging local data.
Commodity currencies are down sharply, with AUD/USD trading at 0.6855 and USD/CAD at 1.3520.
USD/JPY flirts with 135.00, while USD/CHF is trading around 0.9270.
In cash, gold is trading at $1,833 a troy ounce, maintaining its bearish path, while crude oil prices are also easing, and WTI stands at $76.60 a barrel.
He Reserve Bank of New Zealandwill announce its monetary policy decision first thing on Wednesday.
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
