The US Dollar (USD) has logged gains against a number of its major counterparts on Tuesday, but nothing spectacular as markets keep one eye on the situation in Ukraine.
The EURUSD is currently trading just above channel support and 1.3911, having logged a small decline of 0.06% during the European session. The decline comes as a result of economic data both out of the US and Europe. Germany reported a wholesale price index figure of -0.1%, with analysts forecasting a gain of 0.2%. In addition, the range of ZEW surveys all missed expectations, with the Eurozone ZEW sentiment index at 61.5 versus a forecast of 67.3; the German ZEW current conditions index at 51.3 versus a forecast of 52.0; and the German ZEW sentiment index at 46.6 versus a forecast at 53.0.
Compounding the disappointing European data was the US reporting better than expected building permits at 1.018M, with the figure forecast at 0.960M.**relatedarticle**
The GBPUSD is also down, currently trading at 1.6572, a 0.39% discount to the day’s open. The decline comes as the situation in Russia weighs on demand for the Sterling, and may deepen before the end of the day on reports of Russian gunmen storming a Ukrainian military base in Simferopol. Traders will also look to Bank of England Governor Mark Carney for insight into the future of interest rates in the UK as he steps up to speak in London at business close Tuesday, ahead of key unemployment data form the nation on Wednesday.
The USDJPY is down 0.35%, currently trading at 101.40. The decline again comes as investors reallocate capital to the Japanese Yen in response to the potential for an escalating situation in Crimea.
All said, the overarching risk-on sentiment that has dominated Tuesday’s trading might switch if the latest reports coming out of Crimea prove true. If this happens, expect a sell-off in the risk-related currencies such as the AUD and the GBP heading into the daily close.
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