Forex Today: Fear boosted safe-haven assets

What you need to know on Tuesday, February 15:

Tensions between Russia and Ukraine dominated financial markets on Monday, leading to some solid safe-haven demand. The catalyst was a statement from US President Joe Biden, who told his Ukrainian counterpart  Volodymyr Zelensky on Sunday that the US would respond “swiftly and decisively” if Russia takes further steps toward invasion.

Early on Monday, Russian Foreign Minister Sergey Lavrov told President Putin that the US had put forward concrete proposals on reducing military risks and that he could see a way to move forward with talks, although he added that EU and NATO responses have not been satisfactory. Fears partially eased, although risk-off continues.

As the day comes to an end, there are no signs of progress in diplomatic talks, but on the contrary, the Ukrainian President Zelensky reported that he has suspects Russia will likely attack the country on Wednesday, February 16, declaring it a national holiday, the Day of Unity.

The American dollar and gold were the most benefited in a risk-averse environment, with the first further boosted by comments from US St Louis Fed President James Bullard, who reiterated his call for 100bps in interest rate hikes by July 1, citing the last four inflation reports which show broadening inflationary pressures.

A scarce macroeconomic calendar exacerbated risk-related trading, with not much in the docket until next Wednesday, when the US will publish Retail Sales and the FOMC Meeting Minutes.

The EUR/USD pair trades sub-1.1300, while GBP/USD hovers around 1.3520. Commodity-linked currencies are little changed vs the greenback amid soaring gold and oil prices.

Global indexes plunged, with Wall Street accelerating its decline ahead of the close. Government bond yields retreated, with that on the 10-year Treasury note now at around 1.96%.

Gold surged to a fresh 2022 high of $1,872.85 a troy ounce, holding nearby at the time being. Crude oil prices also soared, with WTI trading at $95.25 a barrel.

Shiba Inu struggles to hold support, SHIBA could retest prior range near $0.000020