The US Dollar (USD) is flying all over the place after Russian President Vladimir Putin signed a decree that allows the use of nuclear weapons against a non-nuclear state if it is supported by nuclear powers earlier this Tuesday. The move is widely seen as a clear threat to Ukraine after the United States gave Kyiv permission to use long-range missiles to attack military targets inside Russia. Meanwhile, Ukraine has already fired its first missiles into Russia, with confirmation from both local sources and the Russian Minister Defence Minister, according to Bloomberg. As tensions escalate, US are turning red, and safe havens such as the USD, the Swiss Frank (CHF) and the Japanese Yen (JPY) are seeing substantial inflows. The move is a knee-jerk reaction to the risk-on close that markets saw on Monday. The is all about US Housing data on Tuesday, with the Building Permits and the Housing Starts data. Seeing the recent trend, expectations are that the numbers will point to a broad stabilization in the housing market.
Daily digest market movers: Equities drop on escalation risk
- Building Permits came in at 1,311 million units, which is lower than the previous 1.425 million.
- Housing Starts fell as well to 1.311 million against the previous 1.353 million.
US Dollar Index Technical Analysis: It gets cloudy up ahead (DXY) shakes up markets with geopolitical headlines taking control of markets. While the G20 group is meeting in Brazil, Russian President Putin signs an expanding decree for the use of nuclear weapons in Ukraine. It looks like markets are starting to doubt if this is still part of the normal “flexing the muscles” or this could turn into an actual threat. After a brief test and a firm rejection last Thursday, the 107.00 round level remains in play. A fresh yearly high has already been reached at 107.07, which is the static level to beat. Further up, a fresh two-year high could be reached if 107.35 gets taken out. On the downside, a fresh set of support is coming live. The first level is 105.93, the closing from November 12. A touch lower, the pivotal 105.53 (April 11 high) should avoid any downturns towards 104.00. (Click on image to enlarge)US Dollar Index: Daily ChartMore By This Author:Crude Oil On The Back Foot With US Markets Added To China For Concerns On Demand US Dollar Flat As Geopolitical Takes Centre Stage US Dollar Retreats As Traders Opt To Take Profits Following Trump Trade Rally
