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Geopolitical newsflow takes centre stage as data fails to move markets

Geopolitical newsflow takes centre stage as data fails to move markets

Trader sentiment was once again holding a cautious tone yesterday. Uncertainty regarding tensions centred around Ukraine weighed markets throughout the day as the main pairs continued to operate within tight ranges. Data-wise, US retail sales rose by more than expected, jumping by 3.8% in January, while US industrial production also rose by more than the consensus. Industrial production data was released from the Eurozone as well, and showed that output regained its pre-pandemic level in December. 

Elsewhere, the Fed meeting minutes (after the close in Europe) confirmed the central bank believes that a faster tightening of monetary policy than during the last hiking cycle, is appropriate this time around. The releases did not greatly impact the dollar. 

As we get underway this morning, EUR/USD starts near the midpoint of $1.13-1.14, GBP/USD is operating in the top half of the $1.35-1.36 range and EUR/GBP remains between 83.5-84p. 

Looking to the day ahead, there is a relatively quiet data calendar. Thus, the markets focus will once be reactive to developments in Ukraine and on monetary policy, with a number of key ECB and Fed officials due to make prepared remarks throughout the day. 

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