US dollar strengthens on safe-haven demand

GBPUSD pair dropped 1.6% to the lowest level since December 2021, while EURUSD fell over 1.50% on Thursday, as traders rushed to the safe-haven dollar after Russia launched a broad attack on Ukraine. Russia’s aggression has drawn condemnation and promises of severe sanctions from the US and its allies. The EU diplomat said they want to see the biggest possible package, targeting industry, export controls and financials (however it seems that the energy sector will not be included). Another report said EU diplomats will meet tonight to decide on sanctions and to talk about further sanctions beyond that. US dollar strengthens as some investors worry that widespread sanctions may hurt  the Europe growth and rate-hike outlook, potentially causing stagflation due to soaring commodity prices. Meanwhile reports emerge that the Russian army entered Ukraine through Belarus, in the Chernobyl exclusion zone, which is just north of Kiev.

GBPUSD broke below the major support zone at 1.3350 and if current sentiment prevails, next support at 1.3174 may be at risk. Source: xStation5

EURUSD pair also recorded heavy losses. Major currency pair is currently approaching the support zone around 1.1120. Source: xStation5