EURUSD remains strained as war fears and higher US inflation boosts the greenback.
EURUSD – Weekly Chart
EURUSD has fallen to the 1.055 level, but there could be further losses for the most liquid exchange rate.
What drove the forex markets?
Investors were disappointed after the end of a G20 meeting failed to find a peace deal for Ukraine. The director of the CIA has said that US intelligence believes China is considering supplying “lethal provisions” to Russia, warning that such action would be “very risky and unwise.”
“We’re confident that the Chinese leadership is considering the provision of lethal equipment,” said William Burns.
“We also don’t see that a final decision has been made yet, and we don’t see evidence of actual shipments of lethal equipment.”
Burns added that US President Joe Biden wanted to make clear there would be consequences if Beijing did offer Russia weapons or armaments, saying it “would be a very risky and unwise bet”:
Ukraine’s president Volodymyr Zelensky also said that the return to Ukrainian control of the Crimean peninsula would be part of an end to the war.
Marking the anniversary of Russia’s occupation of Crimea in 2014, he wrote: “This is our land. Our people. Our history. We will return the Ukrainian flag to every corner of Ukraine.”
EURUSD Forecast
The week ahead has economic data for the EURUSD, starting with durable goods orders for the US on Monday. That will be followed by French inflation on Tuesday and German unemployment and inflation on Wednesday. Eurozone inflation and ECB meeting minutes will follow on Thursday.
The US dollar has been lifted by the PCE inflation figures, which suggest that the Federal Reserve still needs to be done raising rates.
