The euro rose early in the European session amid investor vigilance as Ukrainian and Russian negotiators prepared for live peace talks in Turkey.
Hopes for such talks pushed US dollar trading to a slight decline from gains recorded in the previous session. Meanwhile, US 10 -year bond yields rose higher at 2.5%.
Even so, overall factors in the market still support the US dollar following investor expectations of a more aggressive interest rate hike by the Federal Reserve (Fed).
Any move towards a ceasefire or a potential peace deal would support the euro as the European Zone is seen to be experiencing the most significant economic impact as a result of the conflict.
This can be seen from the latest data published at the beginning of the session, where German consumer confidence showed a decline to a one -year low by April.
The decline may be due to the uncertainty created by the war in Ukraine that pushed economic expectations and household incomes to new lows since the 2009 financial crisis.
Meanwhile, the pound plunged to its latest low since November 2020 after being impacted by Central Bank of England (BOE) Governor Andrew Bailey’s statement on uncertainty in interest rate decisions in May.
