Forex Today: Tension in Eastern Europe keeps markets in risk-off mode

What you need to take care of on Wednesday, February 23:

Short-lived optimism ruled financial markets during London trading hours, as Ukrainian President Volodymyr Zelenskyy said that he believes there would not be war nor a wider escalation. However, European and American authorities have anticipated sanctions on Russia. The positive sentiment did not last long, and risk aversion dominated the US session.

The UK was the first to take action, announcing the country would sanction five Russian banks and three individuals, adding that this is just the first tranche of what the government is prepared to do. Also, Ursula  von der Leyen, President of the European Commission, tweeted that “the Union remains united in its support for Ukraine's sovereignty and territorial integrity” and that “a first package of sanctions will be formally tabled today.”

US President Joe Biden gave a press conference on the matter. Among other things, he said: “We have no intention of fighting Russia,” adding that US forces in Europe will help Baltic allies, but "these are totally defensive moves on our part." He says the U.S. and allies "will defend every inch of NATO territory and abide by the commitments we made to NATO."

Soft words from Biden helped Wall Street to trim part of its intraday gains, pushing the greenback lower at the end of the day.

The EUR/USD pair remained lifeless around 1.1350, while the GBP/USD pair saw a little more action but ended the day around 1.3560. The USD/CAD retreated sharply ahead of the close and settled around 1.2740, while AUD/USD advanced for a second consecutive day and settled around 07220.

Safe-havens CHF and JPY edged lower against their American rival, while Gold Prices consolidated gains, with spot now trading around $1,900 a troy ounce. Crude oil prices edged lower, with WTI settled at $91.60 a barrel.

 Markit flash PMIs for the EU, and the US were generally encouraging, indicating economic expansion in February as the world seems ready to put an end to the coronavirus pandemic.

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