AUD/USD slides below 0.7200 following Russian invasion of Ukraine

  • AUD/USD slipped below 0.7200 amid escalating geopolitical tensions.
  • The risk impulse supported the greenback against the antipodes.
  • NATO has just officially announced that an official war has just started.

AUD/USD slipped below 0.7200 amid the escalation of the impending war between Russia and Ukraine, which set a negative tone for the market. This hammered the antipodes and improved the appeal for safe havens.

Market sentiment took a big hit on Thursday after separatist leaders in eastern Ukraine called for support from Russian leader Vladimir Putin, a clear indication of the deployment of Russian troops in the Donetsk and Luhansk regions. In addition, the Russian Federation Council has approved Putin’s deployment of “blue helmets” in the Donbass regions.

Meanwhile, NATO has officially announced that a formal invasion of Ukraine has begun, according to Reuters. Not only will this put pressure on risky assets, but central banks would also be forced to offer monetary policy tightening to contain the expected jump in inflation.

In addition, Reuters reported that the emergency meeting of the United Nations (UN) Security Council has started at Ukraine’s request. However, the chances of a de-escalation in the Russian-Ukrainian war seem dim.

The US Dollar Index (DXY) has been buoyed by investors and the index is not far off claiming 97.00. The risk-taking impulse led to a juggernaut rally in the greenback, which is why the Aussie failed to find ground.

Besides headlines from the Russian-Ukrainian war, investors will keep an eye on Thursday’s US GDP and early unemployment insurance claims.

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