Following three days of gains, global equity markets turned lower on Friday as investors proceeded to profit-taking ahead of the weekend. However, most of the solid gains remained intact despite the ongoing geopolitical conflict in Ukraine, rising oil prices, and interest rate hikes by major central banks.

European stocks turned red after mixed trading in Asia, with US stock index futures pointing to a lower open amid little progress in peace talks between Russia and Ukraine. Furthermore, earlier today, an Ukrainian presidential aide said talks with Russia were progressing slowly. In turn, the Kremlin noted that the Ukrainian delegation hadn't shown willingness to speed up negotiations.  

As risk-on tone started to abate, the safe-haven demand for the dollar reemerged after four days of losses. The USD Index climbed back above the 98.00 figure to notch intraday gains beyond the 98.60 zone. A decisive break above this immediate barrier would pave the way towards the 99.00 mark, followed by this week’s highs around 99.30.  

Adding to a more upbeat tone surrounding the dollar, Fed’s Waller said that the economic data was basically "screaming at us to go for 50 bps," but geopolitical risks called for caution. The debate about 25-50 bps will continue at upcoming meetings, he added. The Federal reserve official also noted that he continued to be in favor of front-loading rate hikes, which implied 50 bps "at one or more" upcoming meetings.  

Against this backdrop, EUR/USD extended the correction from local highs around 1.1140 and was last seen threatening the 1.1000 psychological support, followed by the 1.0950 zone. The common currency would suffer extra losses in the short term if 1.1000 gives up. The medium-term bearish outlook for the euro was expected to remain unchanged while below the 100-DMA, currently at 1.1300.