US dollar stronger across the board

Daily Currency Update

The United States and Europe are set to announce new sanctions on Russia today. The European Commission has already proposed new sanctions including banning Russian coal imports and halting trade worth nearly 20 billion euros. The White House said late on Tuesday that its new measures will target Russian banks and officials and ban investment in Russia. This has seen further gains for the US dollar and weakness in the euro yesterday, with Sterling falling below 1.3100 against the US dollar and breaking 1.2000 against the euro. Investors tend to favour safe haven currencies such as the US dollar during uncertain times.

Macroeconomic data has been thin on the ground so far this week, but this evening all eyes will be on the FOMC meeting minutes due for release at 7pm. Comments from US Federal Reserve’s Lael Brainard yesterday about taking monetary policy to a "more neutral position" later this year has raised expectations of aggressive interest rate rises by the US central bank.

This puts the focus firmly on the release of the minutes from the Fed's last policy meeting, with investors looking for clues over the likelihood of a 50-basis point hike at the US central bank's next meeting in May. US dollar gains could continue in today’s session if both sanctions and the aggressive rate hikes are confirmed.