A lot has happened in financial markets this week, just not in FX markets. EUR/USD started the week at around 1.165 and is not far from that level this morning. While the interest rate markets were still debating whether the problems in the private credit market would also affect corporate bonds, and 10-year US government bonds posted their lowest yields in over 12 months this week, the US Dollar (USD) remained largely unaffected, Commerzbank's FX analyst Volkmar Baur notes.

US inflation figures may bring some movement to EUR/USD

"While the price of Gold rose sharply on Monday and fell by more than 5% on Tuesday alone before stabilizing on Wednesday, EUR/USD was also unaffected by this. There is some discussion of a so-called 'debasement' trade – that is, the question of whether the sharp rise in gold means that fiat currencies are losing value overall. However, this would require money to depreciate across a broad range of real assets, including goods and real estate. And there is no sign of this happening."

"Perhaps most surprising was the non-reaction to yesterday's oil price movements. Brent rose by over 5% in the wake of the announced US sanctions against Russia. However, while the US exports oil and the EU imports it, EUR/USD was once again unaffected by this. The Norwegian krone may have performed best yesterday, as expected. However, with a gain of 0.46% against the US dollar, it was only marginally ahead of the Swedish krona at 0.23%. Even strong movements in other markets are therefore having little effect on currencies at the moment."

"Consequently, the implied volatility of EUR/USD for the next three months has recently fallen significantly again and is at its lowest level since last year's US election. Of course, it may be that the calm in exchange rates will continue and that other markets will also return to calmer waters. However, given the current geopolitical environment, I would not bet too much on this, especially with the upcoming summit between Donald Trump and Xi Jinping next week. And who knows, maybe today's US inflation figures will bring a little more movement to EUR/USD already."