Global markets are still reeling from the outbreak of hostilities in Ukraine. The reaction to such a Black Swan event is predictable: defensive assets are heading north and risk-sensitive assets are heading south.
Safe haven currencies such as the US dollar and the Japanese yen are on the rise. Gold, silver and oil, which retraced to highs since September 2014, are also on an upward trajectory. Equity markets, risk currencies and emerging market currencies are in decline across the board. The Russian ruble has plunged to all-time lows.
Against the backdrop of Russia’s invasion of Ukraine, the EURUSD currency pair broke through the 1.1280 support level, exiting the horizontal range in which it has been trading since the beginning of February. The current downside target is 1.1121.
Today’s macro agenda includes the second estimate of US Q4 GDP. The median consensus is calling for 7.0% in annual terms after expanding by 6.9% in Q3.
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