The EUR/USD is once again under pressure as Asia takes over the baton

EUR/USD is down 0.13 percent, having fallen from a top of 1.1013 to a low of 1.0982 thus far. The US dollar rose on Wednesday as oil prices rose again, with US President Joe Biden set to announce more sanctions against Russia with European leaders during his trip to Europe. Traders are anticipating Biden’s arrival in Brussels later Wednesday to meet with NATO and European leaders in an emergency conference at the headquarters of the Western military alliance. According to Reuters, the US package would include sanctions aimed at Russian members of parliament.

Stocks in the United States plummeted as a result of the news, but treasuries rebounded from historic losses ahead of stricter monetary policy to battle inflation. The S&P 500 fell 1.2 percent, driven by financial sector losses, as the 10-year Treasury yield fell to 2.30 percent after touching highs not seen since mid-2019. Traders are piling into bonds as Federal Reserve officials indicate they are likely to hike interest rates rapidly to manage inflation, and the Ukraine crisis has drove commodity prices up 26 percent this year.

Meanwhile, Loretta Mester, a member of the Federal Open Market Committee, has advocated for 50bp rate rises this year, citing the economy’s surplus demand. She doubts rate hikes will cause a recession and that unwinding the balance sheet will help reduce distortions in the yield curve. President of the Federal Reserve Bank of St. Louis, James Bullard, has maintained his hawkish tone.