US Dollar Index finds support near 96.91, Russia-Ukraine negotiations eyed

• The DXY has stabled around 97.00 amid a lack of clarity over the ceasefire between Moscow and Kyiv.
• The risk-off impulse is still intact despite a little expansion in the risk appetite of investors.
• The sanctions imposed on Russia may soar inflation further, impacting the Fed's tightening plans. 

The US dollar index (DXY) has ceased around 97.00, as investors stare at negotiations between Russia and Ukraine, with the Russian President Vladimir Putin willing to discuss a ceasefire with his Ukrainian counterpart Volodymyr Zelenskyy on Kyiv's surrender.

Earlier, Russia’s military action in Ukraine had caused destruction to human life. To retaliate against the Russian arbitrariness, US President Joe Biden imposed harsh sanctions on Russia to cripple its economy. This contains majorly isolation of Russia by disconnecting it from the SWIFT international banking system and cutting its technology imports.

Moreover, US President Joe Biden said that: This is a premeditated attack. "Putin is the aggressor. Putin chose this war. And now he and his country will bear the consequences." as per Reuters.

Risk implications on Fx

Although the expectations of a ceasefire have increased after the Kremlin and Ukraine have agreed to discuss upon. Following that, the market participants have witnessed ease in the highly volatile trading activities. However, a risk-off impulse is still intact and any negative development on the Russia-Ukraine war may channel funds back to the square.

Meanwhile, the bets over an aggressive monetary policy are back on the table as inflation seems to soar further amid the sanctions on Russia, as its multiplier effect would be increasing West Texas Intermediate (WTI) prices.

Apart from the headlines of expected bombarding on Kyiv by the Kremlin, investors will focus on monthly US Durable Goods Orders and PCE inflation, which are due on Friday.