Forex Today: Optimism returned, but for how long?

What you need to take care of on Thursday, March 10:

The American Dollar and commodity prices were sharply down on Wednesday amid hopes for a solution to the Ukraine-Russia crisis. Ukrainian President Volodymyr Zelenskyy said that Ukraine is ready for a diplomatic solution and prepared for certain compromises if the other part compromises too.  

European Commission President von der Leyen said that they have purchased enough LNG to be independent of Russian gas till the end of the winter.

 Crude oil prices crashed amid prevalent risk appetite and news that Iraq is ready to increase output if OPEC+ requires so. Ihsan Abdul Jabbar Ismail, the Oil Minister, added that the country has about 6% of production as spare capacity, and is producing 4.4 million. It is worth mentioning, however, that at the time being, the country is producing below its quote. WTI is currently changing hands at around $108.00 a barrel.

Spot gold shed roughly $90 per troy ounce and trades at $1,981.

The EUR/USD pair flirted with 1.1100, ending the day at around 1.1070. GBP/USD posted a modest advance and settled at 1.3160.  The AUD/USD pair recovered the 0.7300 threshold, while USD/CAD pair edged lower and trades around 1.2826. Finally, the USD/JPY pair is back above 115.00.

On Thursday, the European Central Bank will announce its monetary policy decision, and market players are anticipating another round of hawkish words from President Christine Lagarde as inflation in the EU keeps hitting record highs. At the same time, the US will publish February’s inflation figures. The Consumer Price Index is foreseen at 7.8% YoY, which would be a multi-decade high and may end up pushing the US Federal Reserve into hiking rates by more than just 25 bps.

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