Joice Alves and John McCrank

NEW YORK (Reuters – On Wednesday, the euro gained over 1% against USD as risk appetite returns to financial markets. Commodity prices have eased since recent highs caused by Russia’s continued invasion of Ukraine.

Following Monday’s 22-month low of $1.0806 on Monday, the euro was at its highest level ever at $1.1019. That was an increase of 1.15%.

One month ago, euro close to $1.15. The rapid fall to $1.10 is possible, according to Joseph Trevisani senior analyst at FXStreet.com.

“That is an extraordinarily fast and steep movement and I think that we are seeing profit-taking but also some reversal on the basis of it,” he stated.

After reaching a peak of 22 months on Monday, the dollar dropped 0.851% against a basket currency including the euro to 98.276,

The market also welcomes a decrease in commodity prices, which has contributed to soaring inflation and increased uncertainty about economic growth.

After falling as low as $120.04 earlier, the price of a barrel was 5.4% lower at $121.02 per barrel. The U.S. West Texas Intermediate dropped 5.3% to $117.14. They are up 40% each since February 23rd, the day Russia attacked Ukraine.

Many investors believed the U.S. ban of Russian oil might not increase a supply shock. However, the International Energy Agency’s head stated that they could continue to tap oil stocks.

Wall Street’s major stock indexes opened sharply higher Wednesday due to rising oil prices. Investors snapped up stocks that were being hampered by Western sanctions against Russia.

Trevisani stated, “It is certainly a risk today in all markets,”

European currencies like the zloty of Poland and Hungary rose sharply after hitting record lows against euro. They were also buoyed by Tuesday’s rate hikes at both central banks.

Although the European Central Bank is meeting on Thursday, money markets anticipate that the policymakers will postpone rate rises to late this year due to the possibility of stagflation. [IRPR]

Jane Foley of Rabobank’s FX Strategy in London said, “European currencies were under severe pressure the past few weeks and some have begun looking stretched.”

Sterling rose by 0.49% to $1.31655 against the US dollar. The zloty of Poland jumped to %6.07 against its greenback, to 4.3095. Hungary’s forint climbed 3.62% up to 342.72.

The White House announced Wednesday that President Joe Biden issued an executive order directing the United States government to evaluate the benefits and risks of creating a digital currency central bank.

Analysts saw the much-anticipated executive order as an acknowledgement of cryptocurrency’s growing significance and potential implications for America and the global financial system.

On track to record its highest gain since Feb. 28 at $42,260. The smaller peer ether saw 6.2% increase to $2,737 and rose by 9%, putting it on pace for the biggest gains in its history.