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Geopolitical risks increase demand for the dollar

February 15, 2022

GBP/USD: Sterling was little changed against the dollar on Monday as the possibility of war in Ukraine and the prospect of a Federal Reserve rate hike gave investors the reason to turn more risk-averse. Riskier currencies such as the Australian dollar struggled while the U.S. dollar, which is seen as a safe haven, strengthened. The pressure on the pound is also exerted by weak statistics on economic growth rates, as well as the scandal around British Prime Minister Boris Johnson, which may cause him to resign. Immediate support is seen at 1.35. A breakout below could take the pair towards 1.3440.

SELL STOP 1.3500/TP 1.3440/SL 1.3520


USD/JPY: The dollar gained against the yen on Monday on growing worries about Russia-Ukraine tensions and after St. Louis Federal Reserve President James Bullard repeated calls for faster U.S. Federal Reserve interest rate hikes. Investors fled to the safe-haven dollar amid the escalating geopolitical problem, but the dollar index quickly came off those highs. The dollar index was last up 0.4% at 96.30 after reaching 96.44. Strong resistance can be seen at 115.50. A breakout to the upside can trigger growth towards 116.00 (Psychological level).

BUY STOP 115.50/TP 116.00/SL 115.30


EUR/USD: The euro declined against the dollar on Monday as investors fretted over escalating tensions surrounding Ukraine and amid caution over monetary tightening and inflationary risks in the United States. The move into safe-haven assets exceeded expectations for monetary policy tightening from the European Central Bank. ECB President Christine Lagarde also recently repeated that any policy action would be gradual. The euro was down 0.4% at $1.1301. Immediate support is seen at 1.1300. A breakout below could take the pair towards 1.1250.

SELL STOP 1.1300/TP 1.1250/SL 1.1320