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ING analysts said investors have grown more optimistic about de-escalation in Ukraine, leaving little geopolitical risk premium in currency markets. They expect FX to reconnect with interest rate differentials and fundamentals, implying a stronger dollar and EUR/USD falling back below 1.10.
The note cites the Swedish krona as stronger than before the invasion.
A stronger dollar on rate divergence would lower dollar-denominated grain and oilseed prices and make U.S. feed ingredients relatively more expensive for importers. The view is an FX forecast rather than a new supply shock.
think.ing.comFrancesco Pesole, Chris TurnerMar 31, 2022After 2,356 past bullish macro events, US Dollar (Broad) moved a median +0.2% over 5 sessions (60% higher; middle half -0.3% to +0.7%), and +0.4% over 20.
After 533 past bearish macro events, Euro (USD per EUR) moved a median -0.3% over 5 sessions (33% higher; middle half -1.2% to +0.2%), and -0.5% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
