The euro fell to its lowest level in five weeks this morning as the prospects for peace in Ukraine appeared to dim, while the kiwi was rattled after New Zealand's central bank announced its biggest rate hike in two decades to curb inflation.

Although the Reserve Bank of New Zealand's 50 basis point hike was larger than many economists had expected, it was within traders' expectations, and policymakers tempered the move by not raising the expected peak in rates. New Zealand's currency moved away from resistance around its 200-day moving average as the central bank presented its actions as an extension of hikes without changing its outlook. The market had a much higher forecast for the top rate than the central bank

The Bank of Canada meets later Wednesday and is also expected to make its largest hike since 2000 as monetary policymakers around the world begin to accelerate their efforts to contain rising price pressures.

The Yen enjoyed a moment of respite yesterday, when slightly more moderate than expected U.S. inflation data allowed investors to take advantage of the market's growing appetite for riskier currencies.The yen enjoyed a moment of respite yesterday, when slightly more moderatethan expected U.S. inflation data allowed bonds to rally and investors tohope that price pressures may have peaked.

On Tuesday, Russian President Vladimir Putin described the peace talks as "a no-win situation", which also weighed on the euro and pound sterling. This also weighedon the euro and the pound sterling, which were vulnerable to concerns about the economic fallout from the war.

The Australian dollar and Chinese yuan also weakened slightly after a surprise drop in Chinese imports reinforced investors' concerns about weakening demand. New restrictions in several Chinese cities to combat Covid also worried investors.

In the U.K., Annual inflation rose to 7% in March 2022 from 6.2% in February, the highest rate since March 1992. The figures are higher than the forecast of 6.7%.