News & analysis

Since Russia’s invasion of Ukraine on February 24th, market pricing has largely been driven by the corresponding economic fallout as Western nations imposed economic sanctions on Russia and global commodity prices soared. Prior to the initial signs of de-escalation in Ukraine, the inflationary impulse stemming from the war stoked expectations of a more aggressive hiking cycle from the Fed, as the risks to the US economy from higher commodity prices were largely inflationary as opposed to impacting growth, like in the UK or the eurozone for example. This led to a stronger dollar against low-yielding currencies, like EUR and JPY, while other European currencies excl. CHF and NOK also weakened on stagflationary concerns. Comparatively, currencies where there was a positive terms-of-trade shock from the onset of the war strengthened against the dollar. This was visible in G10 commodity currencies like CAD, NOK, and AUD.  While the limited progress in peace talks towards the end of the month blurred the overall dollar dynamics due to a positive boost to regional risk sentiment, we still expect some of the dominant drivers of FX markets from March to remain in play in April.

You can read our April 2022 FX Forecasts report here:



Simon Harvey, Head of FX Analysis
Ima Sammani, FX Market Analyst
Jay Zhao-Murray, FX Market Analyst


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