Ukraine crisis continues to steer markets
Yesterday saw a mixed mood on financial markets, as traders continue to digest the fallout from the latest escalation in tensions between Ukraine and Russia. Currency wise, the main FX pairs remained confined to relatively narrow trading ranges with the euro recouping some of its losses from the previous day against safe haven currencies such as the yen and the dollar. On the data front, the latest US flash PMI surveys exceeded consensus and were well above the key 50 level. In the Eurozone, the bellwether German Ifo beat the forecast, rising to 98.9 from 95.7 (vs. 96.5 f’cast) in February.
As we get underway this morning, the slightly firmer tone to the euro is evidenced by EUR/USD opening back up in $1.13 territory. EUR/GBP is changing hands in the bottom half of 83- 84p and GBP/USD remains just below the $1.36 mark.
Looking to the day ahead, there is a sparse data schedule on both sides of the Atlantic. However, testimony by Governor Bailey and three other BoE colleagues before a UK Parliamentary committee will garner close attention. As with the rest of the week though, sentiment is likely to remain sensitive to developments in Ukraine.