Commodity currencies gain as risk optimism begins to return

Even though we’re not at the end of the Russia-Ukraine episode yet, there is a sense that we may have gotten past the culmination point already.

Moscow may just be posturing a little more to play their part but they have gotten what they wanted. It will be up to Putin to see if there is more against Ukraine that he may want to challenge. Otherwise, with the ‘slap on the wrist’ sanctions, there isn’t much else to really be too concerned about before tensions die down.

For now, commodity currencies are starting to trend higher with the aussie and kiwi leading the charge. The latter was already bolstered by a more hawkish RBNZ earlier and is up 0.6% on the day against the yen currently:

NZDJPY D1 23-02

NZD/JPY is trading to fresh highs in five weeks and contesting a potential break above its 200-day moving average (blue line) @ 77.90.

Meanwhile, AUD/USD is up 0.4% to 0.7249 while USD/CAD is trading down to session lows of 1.2730, down 0.3% on the day.

The dollar itself is slightly weaker with EUR/USD up a touch to 1.1340 and GBP/USD up 0.2% to 1.3610 currently.

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