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The Euro was hampered by persistent concerns over the Ukraine situation ahead of Thursday’s New York open, but there was only limited selling.

US initial jobless claims increased to 248,000 in the latest week from a revised 225,000 the previous month and above consensus forecasts of 220.000. Continuing claims, however, declined to 1.59mn from 1.62mn previously.

The Philadelphia Fed manufacturing index retreated to 16.0 for February from 23.2 previously and slightly below consensus forecasts of 20.0. There were also slower rates of growth for production, new orders and unfilled orders, but the figures remained solid.

Employment increased at a faster pace on the month while the workweek increased at a similar pace. There was a slight easing of upward pressure on prices paid while prices received at a faster rate on the month. Companies remained optimistic over the outlook with further strong upward pressure on prices.

ECB chief economist Lane stated that inflation is mostly an imported inflation shock and that there is no boom in domestic demand. He added that the size and frequency of rate moves will depend on inflation. He added that other increments were possible beyond 0.25% moves.

The Euro held around 1.1360 at the European close as the dollar was unable to gain significant traction and was broadly resilient late in the New York session despite a slide in equities. The Euro edged higher to 1.1365 on Friday with no evidence of defensive dollar demand as equity markets attempted to rally.

Position adjustment ahead of the weekend will be important, especially with underlying Ukraine tensions and a US holiday on Monday.




There were still important concerns surrounding the Ukraine situation on Thursday with the White House commenting that they were in a window where a Russian attack could come at any time. Global asset markets continued to react to individual headlines.

St Louis Fed President Bullard maintained a generally hawkish stance with comments that inflation was over300 basis points too high at present and he continued to back raising rates by 1% by July. He also indicated that he would prefer a 0.50 increase in rates at the March meeting, although he would defer to the chair.  

Treasuries edged higher on Thursday with the 10-year yield held around 1.98% while Wall Street equities were on the defensive and the dollar dipped to test support below the 115.00 level. Wall Street remained under pressure later in the session and the dollar again dipped to below the 115.00 level.

Risk appetite attempted to stabilise during Friday’s Asian session with markets taking some reassurance from reports of a meeting between Secretary of State Blinken and Russian Foreign Minister Lavrov. Although there was still an important element of caution, US equity futures rallied which helped curb Asian losses.

The dollar rallied to near 115.20 with the Euro just below 131.00, but with markets braced for further choppy trading during the day.




Sterling held a firm tone ahead of Thursday’s New York open with further support from underlying money-market yields and expectations of further short-term rate hikes by the Bank of England. There were strong expectations that the central bank would increase rates again in March with some speculation that the bank could sanction a 0.50% rate hike.  The UK currency probed the 1.3600 level against the dollar while the Euro also dipped to below 0.8350.

Although risk conditions were weaker after the Wall Street open, Sterling was able to resist any selling pressure and moved to highs around 1.3620 against the dollar while the Euro remained firmly on the defensive and traded close to two-week lows below 0.8350.

UK retail sales increased 1.9% for January after a revised 4.0% decline for December an annual increase of 9.1%. Sterling held a firm tone after the data and traded around 1.3615 against the dollar. Overall global risk trends will continue to have a significant impact on UK markets during the day.




The Swiss franc maintained a strong tone on Thursday with the fresh advance for gold an important factor underpinning demand for the Swiss currency, especially with underlying concerns over the Ukraine situation still an important factor.

The Euro re-tested support close to 1.0450 before stabilising while the dollar dipped to test support below the 0.9200 level. The franc edged lower on Friday as risk conditions stabilised with the Euro around 1.0470 and the dollar holding above the 0.9200 level.

Technical Levels 

Calendar Levels 



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