Initial reports indicate that the attack on Europe's largest nuclear power plant was followed by a takeover by the Russian military. Financial markets are reacting with a particular increase in risk aversion, as this has now definitely increased in Europe.
The zloty started the day with a huge weakening, and there is no trace left after the currency interventions conducted by the National Bank of Poland this week. The euro costs 4.84 PLN in the morning and may be approaching the level established during the great financial crisis. Then, the euro cost 4.93 PLN. The dollar, in turn, costs PLN 4.39, while the pound should be paid already PLN 5.86. This is the highest level since the end of 2015. The escalation of the Russian assault on Ukraine could put a lot of pressure on the NBP, which in turn could raise interest rates further to try to stop further depreciation of the PLN.
Dollar holds near 2-year highs
The Dollar Index held at 20-month highs on Friday, above 97.8 points, which may cause EUR/USD to fall to 1.10. Investors may have sought safety in the US currency at a time of geopolitical and economic uncertainty.
Investors are also awaiting today's US employment report for February. Estimates are for 400,000 additional jobs, and annual wage growth is expected to be 5.8 percent.
This is the last employment report before the next Federal Reserve meeting where interest rate hikes are expected to begin, Fed Chairman Jerome Powell is leaning towards a 25 basis point hike in March while leaving the door open for more aggressive action in the future if inflation persists.
Crude oil may have stopped its price rally for a while due to a possible agreement between the US and Iran. The release of about 1 million barrels per day of oil from Iran could help at least dampen the upward trend in the oil market as Western countries consider cutting off supplies from Russia.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.17% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
