Forex Today: Reports: Russia Asking China for Military and Economic Help

The Russian invasion of Ukraine enters its third week, with Russia beginning to attack targets in the west of Ukraine and warning the US that military equipment supplied to Ukraine is a legitimate target, presumably only once they cross the Polish border. The New York Times and the Financial Times are reporting that Russia has been asking China for military equipment and economic assistance to help with its war in Ukraine and against western sanctions. It is reported that China may be inclined to help soon, but has not done so yet. The US has warned China there will “consequences” if any such assistance is given.War-driven trends in financial markets reversed quite strongly towards the end of last week, with all agricultural commodities well off their highs except Corn, which looks likely to trade higher this week.Markets are dominated by a strong US Dollar and weak Japanese Yen, with the British Pound also weak and commodity currencies falling. The USD/JPY currency pair continues to rise strongly to new 5-year high prices and looks likely to rise higher still as it trades into blue sky. There are no obvious resistance levels below 119.00. The Dollar is very strong, boosted by the anticipated start of a rate hiking cycle at Wednesday’s FOMC meeting, and rising US treasury yields which see the 10 year yield just a whisker under 2%.

There will be a release of Australian Monetary Policy Meeting Minutes later today, which will be watched closely by Australian Dollar traders.Daily new coronavirus cases globally rose last week for the first time since January, suggesting that the omicron variant wave is not ready to disappear yet.It is estimated that 63.5% of the world’s population has received at least one dose of a coronavirus vaccination.Total confirmed new coronavirus cases worldwide stand at over 458.5 million with an average case fatality rate of 1.32%.The rate of new coronavirus infections appears to now be increasing only in Australia, Austria, Finland, Greece, South Korea, Malaysia, New Zealand, Tonga, Tunisia, the UK, Vanuatu, and Vietnam.