The U.S. Dollar Strengthens as Investors Continue to Keep an Eye on Ukraine

The dollar strengthened today in Asia as investors look for ways to deal with the situation in Ukraine.

  • The US dollar index in a basket of other currencies rose 0.04% to 96.050.
  • The yen fell 0.05% to 115.02.
  • The Australian dollar rose 0.07% to 0.7224.
  • The New Zealand dollar rose 0.50% to 0.6764, after the Reserve Bank of New Zealand raised interest rates. This is the third interest rate hike in a row. The bank also said it could take tighter inflation controls.
  • The yuan rose 0.01% to 6.3269.
  • The pound rose 0.09% to 1.3594.
  • The baht depreciated to 32.45 baht per dollar

Tensions between Russia and Ukraine remain in the spotlight with western countries imposing sanctions on Russia.

US President Joe Biden on Tuesday imposed sanctions on two Russian banks and Russian billionaires. It came after Russian President Vladimir Putin ordered troops to enter the two regions separated from eastern Ukraine, Donetsk, and Luhansk.

Meanwhile, Germany is suspending its most important gas pipeline project, Nord Stream 2, with Russia. German Chancellor Olaf Scholz has put the certification of the gas pipeline on hold for the time being.

The Japanese yen and Swiss franc also moved last week as investors turned to safer assets amid growing concerns.

“Tensions between Russia and Ukraine are a major concern. The market reaction is gradual until now as the actions of Russia, Europe and the US have been in the spotlight for some time.”

CBA analysts said

Investors now expect the Federal Reserve to raise interest rates as commodity costs are expected to rise due to tensions between Russia and Ukraine.

Meanwhile, investors are waiting for U.S. economic data on new housing sales, GDP and initial jobless claims.

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