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The euro edged higher on Thursday extending a run of gains on hopes for progress in Ukraine peace talks, while investors’ focused on the European Central Bank’s potential monetary tightening after strong inflation data. Analysts remain cautious about further euro gains as Russian forces prepared for new attacks in the east of Ukraine, while no quick resolution is expected from peace talks that will resume on Friday. Money markets are currently pricing in an around 90% chance of 20 basis points (bps) of ECB rate hikes by July 2022 and 65 bps by year-end. European Central Bank President Christine Lagarde said on Wednesday inflation should stop rising after data in Spain and Germany showed a higher-than-expected rise in consumer prices.To get more news about fxsway, you can visit wikifx.com official website.
The U.S. dollar edged lower Thursday ahead of key employment data, while the euro held at a one-month high against the greenback on hopes the Ukraine/Russia conflict is heading towards a de-escalation phase. The U.S. dollar received a boost Wednesday after data from the ADP Research Institute showed that U.S. companies employed an additional 455,000 people in March, growth which is consistent with the Federal Reserve’s view that the labor market is robust. This comes ahead of Thursday’s weekly initial jobless claims data and, more importantly, Friday’s monthly official jobs report. The U.S. Federal Reserve lifted interest rates earlier this month and signaled a series of increases ahead to combat soaring inflation, so long as the economy didn’t retreat into recession, as an inverted yield curve has warned about. The strength of the labor market suggests the Fed will feel confident about going ahead with more interest rate hikes in the months ahead, to the benefit of the dollar. Elsewhere, EUR/USD rose 0.1% to 1.1172, with the single currency gaining around 1.6% this week, climbing to its highest level in a month, on increasing hopes that the conflict in Ukraine could be approaching a conclusion. The peace talks between Ukraine and Russia in Istanbul earlier in the week raised hopes of a breakthrough. And although Russia has continued attacks in the east of the country, its promise to scale down military operations around Kyiv has raised hopes that the conflict could be entering a new phase involving the de-escalation of the violence. New peace talks are also scheduled for Friday. GBP/USD rose 0.1% to 1.3140, helped by data showing Britain's economy grew more quickly than previously thought in the last three months of 2021, with GDP increasing by 1.3% in the fourth quarter from the previous three-month period, stronger than a preliminary estimate of growth of 1.0%.
Oil prices plunged on Thursday on news that the United States was considering the release of up to 180 million barrels from its Strategic Petroleum Reserve, the largest in the near 50-year history of the SPR. Brent crude futures for May fell $4.87, or 4.3%, to $108.58 a barrel by 0855 GMT. The May contract expires on Thursday and the most actively traded June futures were down $5.08 at $106.36, having earlier slid by more than $6. U.S. President Joe Biden will speak later on Thursday regarding his administration's actions aimed at lowering gasoline prices that have risen to record highs since Russia began its invasion of Ukraine. International Energy Agency (IEA) member countries are due to meet on Friday at 1200 GMT to decide on a potential collective oil release, a spokesperson for New Zealand's energy minister said on Thursday. The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia meet on Thursday and are expected to stick with a planned increase in their May output target. Oil rose by around 3% on Wednesday as peace talks stalled between Ukraine and Russia, the world's second-largest oil exporter. Western financial sanctions imposed on Moscow over its invasion of Ukraine have disrupted its crude oil and oil product exports. Russia calls its actions in Ukraine a "special operation".
Gold prices fell in range-bound trade on Thursday, although the safe-haven metal was set for its biggest quarterly gain since September 2020, as the Russia-Ukraine conflict dampened risk appetite and lifted bullion's appeal. Ukrainian forces are preparing for new Russian attacks in the east of the country as Moscow builds up its troops there after suffering setbacks near the capital Kyiv, President Volodymyr Zelenskiy said on Thursday. Bullion is considered a safe store of value during times of political and financial uncertainty, and is viewed as a hedge against inflationary pressures. However, rising interest rates increase the opportunity cost of holding non-yielding gold.