Much of that weakness was due to the strength of the euro, which rebounded on Tuesday following Russia’s promise during peace talks to scale back its attacks on kyiv.
The change in tone in the Russia-Ukraine peace talks suggested “the conflict may be moving into a more localized phase with some of the more extreme risk scenarios reducing in probability,” JPMorgan analysts said in a note to clients on Thursday. Wednesday that recommended buying the euro/dollar parity.
Nevertheless, The United States warned that it had seen “no signs of real seriousness” in the pursuit of peace by Russia, whose forces continued to shell the outskirts of kyiv and a besieged city in northern Ukraine on Wednesday..
Although optimism over Moscow-kyiv talks faded, inflation reports stoked expectations that rising costs, accelerated by Russia’s invasion of Ukraine, would force Europe to raise interest rates sooner rather than later, supporting to the euro.
Preliminary data showed that German annual inflation advanced to its highest level in more than 40 years in March as prices for natural gas and petroleum products soared. Preliminary CPI data from Spain for March showed prices rising at their fastest pace since May 1985.
The euro traded at its highest level against the dollar since March 1, later trading 0.6% higher at $1.1152.
Elsewhere, the yen gained 0.83% against the US currency at 121.85 per dollar.
Source: Ambito
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