Fed reassures investors on US stability despite long term impacts of Russo-Ukraine conflict; Russia stocks cut from equity indexes; the war will amplify global inflation woes adding 3%; Long-term outlook for a weaker euro.
March 3, 2022
GBP/USD 1.3384 GBP/EUR 1.2070 EUR/USD 1.1089 USD/CAD 1.2617 EUR/CHF 1.0195 EUR/SEK 10.7795 EUR/NOK 9.8580 EUR/DKK 7.4399 USD/ILS 3.2365 AUD/USD 0.7308 NZD/USD 0.6781 USD/SGD 1.3581 USD/JPY 115.72 USD/CNH 6.3230 USD/INR 75.8613 EUR/ILS 3.5887 GBP/ILS 4.3313 USD/ZAR 15.3149
The BoE warned that European conflict could upend the UK economic outlook, suggesting the war will stunt growth, and depress value for riskier assets. The Ukraine conflict has potentially highlighted the limitations of separation from the EU, on the geopolitical stage the necessity for UK-European collaboration is evident.
The FTSE has opened higher 0.31% as we print, GBPUSD trades lower by -0.1%.EUR
The outlook for the Euro is suggested to be poor, as Russia’s invasion pulls at the currency’s weaknesses. EURUSD has already declined -2.5% YTD, and if yield differentials between the dollar and euro widen, it could fall even lower. Impeded economic growth combined with spiraling inflations only mounts to the ECB’s issues on deciding when to withdraw stimulus and hike rates, knowing that divergence from FOMC policy will exacerbate issues.
European countries continue to commit lethal and non-lethal aid to the Ukraine conflict, as European nations rearm and pledge to meet NATO GDP requirements for the first time in decades.USD
The Fed’s Jerome Powell, warned of the serious effects to be felt in the US and globally due to Ukraine, he eased concerns and pushed US futures and the dollar higher, stating that it is likely the Fed can achieve a ‘soft landing’.
Key democratic senators also highlighted the potential revival of Biden’s economic agenda, if it were slimmed down.
The Bloomberg commodity index is on track for record weekly gains, as uncertainty over Ukraine spurs demand for fuels and metals.ASIA/PACIFIC
As Xi Jinping prepares for his third term, he is posed with new issues facing China. China faces the weakest growth in decades, a property crisis and poor investor confidence in Chinese markets which will require a different approach from Beijing.
Hong Kong’s PMI fell to 42.9 in February, the lowest since April 2020, likely due to widespread and draconian covid restrictions.
Asia equities were mostly finishing positive during today’s Asian session. The Nikkei closed up 0.7% as well as the Hang Seng up 0.55%. The CSI closed down -0.6%.ILS
USDILS trades up 0.4% intraday at 3.233. As daily volatility exceeds 1%, at an average of 1.14%.
February saw a change in trend direction, with February prices significantly exceeding January prices, as USDILS appears to bounce between 3.2 and 3.25.Data & Events
Second round of talks between Russia and Ukraine.
EU, UK – Markit Services, Composite PMI
EU – Jan PPI, Jan Unemployment
Trading in financial instruments may involve a high degree of risk and may not be suitable for all investors. Trading in financial instruments can result in both loss and profit. Investors should carefully consider whether financial instruments suit their needs, financial resources and personal circumstances.
The information contained in this material is solely for informational purposes only and it is not and should not be construed as an offer or a solicitation of an offer to buy or sell any financial instruments and cannot be relied upon as a representation that any particular transaction necessarily could have been or can be effected at the stated prices. This material does not contrue advice.
For more analysis on FX markets or information regarding SVB's FX services:
0800 023 1440 from within the UK
+44 207 367 7880 from overseas
See all of SVB's latest FX information and commentary.
© 2022 SVB Financial Group. All rights reserved. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB).
Silicon Valley Bank is registered in England and Wales at Alphabeta, 14-18 Finsbury Square, London EC2A 1BR, UK under No. FC029579. Silicon Valley Bank is authorised and regulated by the California Department of Business Oversight and the United States Federal Reserve Bank; authorised by the Prudential Regulation Authority with number 577295; and subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. Silicon Valley Bank is a subsidiary of SVB Financial Group, a Delaware corporation and is an affiliate of SVB Financial Group UK Limited. SVB Financial Group UK Ltd is registered in England and Wales at Alphabeta, 14-18 Finsbury Square, London EC2A 1BR, UK under No. 5572575 and is authorised and regulated by the Financial Conduct Authority, with reference number 446159. SVB Financial Group and its subsidiary Silicon Valley Bank are members of the Federal Reserve System and Silicon Valley Bank is a member of the FDIC.
Your eligible deposits with Silicon Valley Bank UK are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit guarantee scheme. Any deposits you hold above the limit are unlikely to be covered. Please click here for further information or visit http://www.fscs.org.uk. For more detailed information about coverage and limits, please review our FSCS Information Sheet at http://www.fscs.org.uk.
This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal, accounting and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources. Opinions expressed are our opinions as of the date of this content only. The material is based upon information which we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such.