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- As the Ukraine war rages on, the Euro is losing ground against the US dollar.
- It has been reported that Russian oil and gas contracts that are already in place are still being delivered, but that energy traders are not writing new contracts.
- Last night, the euro fell to its lowest level since June 2020 as the Ukraine war raged on, causing increased concern about EU energy supply.
- The EU’s reliance on Russian energy supplies exposes the continent to supply constraints. With the addition of US Dollar haven buying, the EUR/USD remains under pressure.
- Concerns have been raised about future sanctions imposed on Russia, including the prohibition on receiving oil and gas from Russia as well as the ability to pay suppliers.
- Elsewhere, prices for non-Russian gas, gasoline, heating oil, and liquefied natural gas (LNG) are rising.
- After the North American close, US President Joe Biden delivered his State of the Union address.
- He reiterated his support for the Ukrainian people and, for the second time, referred to Russian President Vladimir Putin as a dictator, also discussing returning to normalcy following the pandemic, as well as the economy.
- As a result, the market has hoovered up energy commodities sourced elsewhere. At the time of writing, Brent and WTI crude oil were trading above US$110 per barrel and US$108.50 per barrel, respectively.
- With the exception of Australia’s ASX 200, which saw a modest gain due to commodities, APAC equities reflected these losses.
- Looking ahead, there are some mortgage and job numbers from the United States, but the focus will remain on developments in Ukraine.