February 23, 2024

EUR/USD Bulls Exercise Caution as Eastern European Crisis Fill the Air

Just a Little Relief

The EUR/USD trading is doing well in the market today as it is trading by 0.12% higher in the Asian session while the Euro plays catch-up in an attempted corrective measure against the US dollar. It appears like a “watch and see” situation is about to be unveiled in the market. Bullish traders closed in on the low points of trades on Monday and took firm control of the Asian session even as threats of a Russian invasion of Ukraine remained in the air.

The shares benchmark in Asia has fallen in the early hours of trade following contemplations by investors of a possible Russian invasion of its small neighbor, Ukraine. The numerous headlines on tabloids about the effects of war on the financial market at the beginning of the week created an uneasy atmosphere in US and European sessions.

The Morgan Stanley Capital International index on the Asia-Pacific stock outside of Japan went down by 0.4% in the early session of the Asian trades while it tracked losses in the West on Monday. Meanwhile, Dow Jones lost up to 0.49% overnight while the S&P 500 futures dropped 0.38%. 

In Japan, the Nikkei shed 0.5% at the time of putting this together, and the S&P/ASX200 in Australia was off by 0.14%. The Hang Seng Index in Hong Kong went down by 0.67% quite early in the Asian session as the Chinese CSI300 Index survived the trend and increased by 0.41%.

The Russian Effect on Markets 

In the course of the past week, statements have come from the White House saying that Russia could proceed to invade Ukraine any moment and Boris Johnson, the British Prime Minister, described the situation as very dangerous.

Furthermore, Antony Bliken, the American Secretary of State, has indicated that the American embassy in Ukraine will be moved from Kyiv to and stationed in Lviv, pointing at the momentous speed of the Russian buildup of forces at the Ukraine border. This move was further followed up by comments from President Vladimir Zelenskiy of Ukraine that there could be an invasion as early as the 16th of February.

The President has asked Ukrainians to hoist the country’s flag on every house and chant the national anthem together on the 16th of February. It is the date circulated in some Western media as the possible date of the start of the Russian invasion. A top Ukrainian official, however, said that President Zelenskiy is not predicting an invasion on that day, but it is a mere skeptical response to foreign media.

The rumors have created frictions on all sides of the market overnight, but it all seems to have settled as diplomacy is coming to the fore. Russian President, Vladimir Putin, has shown interest in continuous efforts to bring the standoff to an end by diplomatic means.   

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