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Safe Havens Lose Appeal On Prospect Of Blinken/Lavrov Talks Over Ukraine

FOREX

Political risk pendulum swung towards optimism after the U.S. confirmed that its chief diplomat will meet with his Russian counterpart next week for diplomatic talks on the Ukraine crisis. The news assuaged fears of imminent military escalation, even as Western press reports continued to raise the prospect of Russian false flag operations, while the Donbas rebels blamed Kyiv for renewed shelling.

  • High-beta currencies regained poise after headlines re: Blinken/Lavrov negotiations hit the wires, with the kiwi leading gains after showing resilience to geopolitical risk in early trade. Safe havens fell out of favour, with USD/JPY bouncing off its 50-DMA. The rouble edged higher but its appreciation was fairly limited in comparison with yesterday's sell-off.
  • The data docket is headlined by UK & Canadian retail sales as well as U.S. existing home sales. Speeches are due from Fed's Evans, Williams & Brainard and ECB's Vasle & Panetta.

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