Investors rushing to safe-haven US dollar

EUR

The euro recovered slightly against both the pound and dollar on Monday as headlines stated that Russia would immediately cease its military campaign if Ukraine agreed to a list of demands.

Kremlin spokesperson Dimitry Peskov said Russia would withdraw forces if Ukraine ceases military action, changes its constitution to enshrine neutrality, acknowledges Crimea as Russian territory, and recognises the separatist republics of Donetsk and Lugansk as independent states. Peskov stated that once these conditions are met, “this is how it will stop”. The euro is likely to remain under pressure until further developments are made between both nations to cease fire.

Lastly, investors will now turn focus to the meeting between Russia’s Foreign Minister Sergei Lavrov and Ukrainian counterpart Dmytro Kuleba in southern Turkey on Thursday, the first potential talks between the top diplomats since Russia launched its invasion of Ukraine.

GBP

The pound fell to its lowest level since December 2020 against the US dollar as investors rush to the safe-haven currency. The dollar has seen some gains and strengthened against the pound causing cable to fall. Sterling will continue to be under pressure until a de-escalation of tensions between Russia and Ukraine.

Key announcements

00:00 – GBP – BRC Retail Sales Monitor y/y (Feb) – Forecast 4,7% vs Actual 2.7%

07:00 – EUR – German Industrial Production m/m (Jan) – Forecast 0.5% vs Actual 2.7%

10:00 – EUR – Employment Overall (Q4)