It is clear that central banks will need to respond to the current spike in energy prices. How they respond will be decisive in determining whether the global economy enters a recession or avoids one.
The EUR/USD pair ends the week around 1.1530, barely below its opening but off the peak at 1.1640. Widespread optimism on Monday was diluted as days went by, and financial markets moved once again on war-related headlines.
Gold is back in the red early Monday, looking to test the $4,400 level after failing to resist above the $4,500 mark yet again.
The US Dollar (USD) has regained its shine this week, allowing the favourable macro picture to remain unchanged.
Part One of this analysis published on March 12, when the war was two weeks old and the oil shock was still being absorbed as a discrete event. Three weeks in, the picture is materially different.
A finish around the 1.15103 mark going into this weekend, after the 1.16300 vicinity was seen on Wednesday demonstrates the shifting sentiment that shadows the broad Forex market.