BLOG | March 09, 2022

Forex Update: Currencies and Commodities Go Nuts as Russia-Ukraine Crisis Deepens

By Tad DeVan, Senior Currency Strategist, MTI

Week of: 03/07/22 – 03/11/22

We’re continuing to witness wild swings in the market this week. 

Commodity prices are going bonkers as the uncertainty from the Russia-Ukraine crisis deepens. Prices of commodities from wheat to nickel have surged to records as Western nations weigh up new sanctions on Russia’s energy sector.

Crude oil prices, on the other hand, came back down after going as high as $140 per barrel. The fall was seen after the head of the International Energy Agency (IEA) said it could release more oil. The news also helped stock markets and Dow futures shot up over 400 points.  

Meanwhile, the U.S. job market is continuing its rebound as America added more jobs than expected last month. It added 678,000 jobs in February and the unemployment rate also came in lower at 3.8% from 4%. 

Taking cues from the above developments and some data releases, major currency pairs saw some big moves this week.

  • The U.S. Dollar rose against major peers as traders sought safe-haven bets. It, however, saw losses later in the week.
  • The euro continued its downward fall as Mediterranean sovereign bond yields spiked amid fears of another Eurozone debt crisis. While it saw a rebound on Wednesday, many feared a looming fall given the growing Fed and ECB policy divergence.
  • The ruble fell to a new record low as market participants feared an economic collapse.
  • At the time of writing, the dollar index (DYX) stood at 98.14 (down 0.94%), while the euro (EURUSD) was trading at $1.1039 (up 1.28%). 
  • The safe-haven yen is witnessing buying this week and is currently trading at 115.70 per dollar (up 0.03%).

Traders will now track the European Central Bank’s (ECB) interest rate decision and the U.S. inflation reading which will be out this week.

And all of the above concerns will continue to dominate traders’ minds this week.

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I hope to see you on the other side!

Until then, 

Have a safe and profitable trading week 😀


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