- EUR/USD is likely to plunge near 1.1108 on weaponry aid from the Western leaders.
- Belarus is preparing to join Russia, bringing in a fresh wave of risk-aversion.
- The recession situation in Europe has underpinned the greenback against the euro.
The EUR/USD pair is likely to retest fresh 2022 lows near 1.1100, as the tensions between Russia and Ukraine escalate after the Washington Post has reported that Belarus is likely to join Russia's invasion. The former is preparing its military troops to send them to support the Russian military as soon as on Monday, a US administration official cited.
Meanwhile, the Australian government announced on Monday that, they will provide lethal military equipment to Ukraine in response to Russian military activity last week.
Apart from Australia, the Canadian Foreign Affairs Minister Melanie Joly also announced that their administration will provide an additional $25 million worth of defensive military equipment to Ukraine.
No one could deny the fact that the Western leaders are favoring Ukraine and providing weaponry aid to support them indirectly against Putin’s decision of destruction in Ukraine. Although the other nations are supporting Ukraine, the overall picture of the war between Moscow and Kyiv is escalating further. This may advocate the situation of recession in Europe and the EU (European Union) will require resorting to cautioned fiscal policies. Also, this has weakened the euro against the greenback.
The US dollar index (DXY) looks to reclaim the last week’s high at 97.64 amid broader improvement in safe-haven appeal. Moreover, Anticipation ahead of Wednesday’s testimony from the Federal Reserve (Fed) Chair Jerome Powell is keeping the bulls in control.
The monthly Harmonized Index of Consumer Prices (HICP) from Eurostat will be one of the major events for investors to keep under the radar alongside the geopolitical developments.