Equities Losing Recovery Momentum, Dollar Holds steady

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Following a positive start to the week, European equity markets are coming off session highs, retreating back to the flat-line ahead of the opening bell on Wall Street. The session is very light on the news front, making stocks struggle to retain a bullish bias as geopolitical tensions stay elevated. The UN Security Council is set to meet later today to discuss ongoing tensions surrounding Ukraine.

Of note, the S&P 500 index futures fell after the recent gains while the Nasdaq Composite struggles for direction after a 3%-rally witnessed on Friday, suggesting investors could see another volatile session. Today is the last trading day of January, with the index of global equities heading to its worst month since March 2020 when the pandemic began.

Against this backdrop, the USD index has settled above the 97.00 figure after an initial dip below this level earlier in the day. The greenback came off fresh mid-2020 highs seen last week but stays steady and elevated as risk sentiment remains uncertain at this point. The index was last seen changing hands around 97.16, down just 0.15% on the day. Should the safe-haven demand for the US currency reemerge anytime soon, the prices could retarget the 97.30 intermediate barrier on the way towards the mentioned high of 97.44.

As the buck has already erased part of intraday losses, the euro came off local highs around 1.1180 to settle around 1.1160. EURUSD failed to regain the 1.1200 figure and keeps clinging to the lower end of the extended trading range, looking vulnerable to deeper losses in the coming days. Should dollar bulls reenter the game, the pair may derail the 1.1100 level for the first time since May 2020.