Forex Today: War drums hit financial boards, panic temporarily recedes

What you need to take care of on Friday, February 25:

 Panic took over financial markets as Russia launched a military attack on Ukraine. Moscow attacked not only the Donbass region but got near Kyiv during US trading hours. Russia ignores global sanctions and seems determined to take full control of Ukraine.

A nuclear waste storage facility in Chernobyl, Ukraine, was destroyed after Russian forces entered and fighting broke out, an advisor to the Ukrainian Interior Ministry told NBC. The advisor warned that radioactive dust could cover the territories of Ukraine, Belarus and the EU.

Russian President Vladimir Putin said that they had no other chance but to act differently, as all previous attempts to change the situation were fruitless. He added that Russia remains a part of the global economy and do not plan to damage the system they belong to.

However, the whole world condemned the situation and announced sanctions on Russia. The UK has been among the most aggressive, as UK Prime Minister Boris Johnson pushed for Russia to be ejected from SWIFT system. Earlier in the day, Johnson said that the UK would provide Ukraine defensive weaponry while doing everything to keep Britain safe. Additionally, he said that the kingdom  will agree  with allies “on a massive package of economic sanctions designed in time to hobble the Russian economy.”

NATO Secretary General Jens Stoltenberg said on Thursday that Russia is using force to try to rewrite history, as reported by Reuters. Among other things, he said that the organism will deploy  “capabilities and forces including NATO Response Force," adding that they would do whatever is necessary to shield the alliance from aggression.

French President Emmanuel Macron said that Russia’s deliberate choice to attack Ukraine violated UN rules, adding that France stands beside Ukraine and that the country will respond “without weakness” to this act of war. Finally, he noted that sanctions against Russia would factor in the energy sector.

US President Joe Biden announced a series of sanctions on Russian institutions and people, aimed to maximize the long-term impact on Russia and minimize the effect on the rest of the world. Finally, the European Council agreed on further restrictive measures that will impose “massive and severe consequences” on Russia for its actions.

Gold soared to $1.974.40 a troy ounce, its highest since September 2020. The metal pulled back ad plummeted to the current $1,880.00 price zone during US trading hours, where it currently stands, as market players unwind fear-related trades following US President Biden's statement.

Meanwhile, Federal Reserve Raphael Bostic noted that Fed policy is poised to return to a more normalized stance. Among other things, he added that he is “very open” to going for more than 3 rate hikes this year.  

EUR/USD recovered from a fresh 2022 low of 1.1105 to currently trade around 1.1200. The GBP/USD pair stands at around 1.3400, while commodity-linked currencies also shed part of their intraday gains

Crude oil prices also dipped into negative territory after reaching multi-year highs. WTI traded as high as $100.50 a barrel, now changing hands at around $92.20.

Wall Street trimmed most of its intraday losses, trading mixed ahead of the close. The Nasdaq Composite is the best performer, up over 200 points after shedding roughly 4% at the beginning of the day.

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