EUR/USD holds in bullish territory as US dollar index slides below 98.00

• EUR/USD rallies on a softer US dollar following the Fed. 
• Russian sanctions remain a risk for markets. 

The euro rose on Thursday with investors closely watching for developments in talks between Russia and Ukraine, while the Federal Reserve's monetary policy decision failed to affect the market as the bar for a hawkish surprise was high. In Asian markets on Friday, the single currency is flat and off the highs of 1.1118 trading near 1.1087 at the time of writing and near the lows of the session. 

The Fed kicked off its monetary policy tightening with a 25 basis point increase on Wednesday. However, despite the increased dots, the US dollar needed a more hawkish outcome to prevent the unwind as US treasuries fluctuated. The US dollar index is down 0.8% on the day overnight and remains heavy in Asian markets as it takes on the 98 figure to the downside, testing  the 97.80s.

In data on Thursday, the Eurozone Consumer Price Index for February was finalised slightly higher at 5.9%y/y (prior 5.8%YoY). The core was unchanged. US industrial production in February rose 0.5% MoM (as expected). US Weekly initial jobless claims were close to expectations at 214k and continuous claims at 1.419m.

Russian sanctions dig in

Meanwhile, global markets are keeping a close eye on Russia's capacity to repay its debt. Investors were reassured on Thursday that Russia may, at least for now, have averted what would have been its first external bond default in a century.

''This was because creditors received payment, in dollars, of Russian bond coupons which fell due this week,'' two market sources told Reuters on Thursday. Dmitry Peskov, a spokesperson for the Kremlin, said the country has all the resources it needs to avoid default.

As for sanctions, the saga continues. The US House of Representatives decisively decided to cease regular trade relations with Russia, allowing the US to sharply raise tariffs on Russian goods entering the nation. On Friday, US President Joe Biden and Chinese President Xi Jinping will discuss Russia.  Secretary of State Anthony Blinken told reporters that Biden will make it clear to Xi that if China backs Russia, the US will impose "costs."