Dollar Up, Investors Look to the Latest Developments in Ukraine

By Gina Lee – The dollar was up on Wednesday morning in Asia. Investors look to get a handle on the latest developments in Ukraine.

U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.04% to 96.050 by 11:32 PM ET (4:32 AM GMT).

The USD/JPY pair inched down 0.05% to 115.02.

The AUD/USD pair inched up 0.07% to 0.7224. The NZD/USD pair was up 0.50% to 0.6764 after the Reserve Bank of New Zealand raised interest rates, its third hike in a row. The bank also said there could be more tightening to tame inflation.

The USD/CNY pair inched up 0.01% to 6.3269 while the GBP/USD pair inched up 0.09% to 1.3594.

Russia-Ukraine tensions are still on investors’ radar as the West has imposed sanctions on Russia.

U.S. President Joe Biden took measures that target Russia’s elites and sale of sovereign debt on Tuesday after Russian President Vladimir Putin ordered troops in two breakaway regions in easter Ukraine. The sanctions are to punish Russia’s economy but are not intended to hit energy markets, a senior U.S. State Department official said.

Meanwhile, Germany halted a major gas pipeline project from Russia. U.S. Treasuries edged higher following the sanctions.

As investors turn to safe-haven assets over growing concerns, both the Japanese yen and Swiss franc had been advancing for the past week.

One U.S. dollar was worth 115.03 yen in early Asia trade, with the greenback having “Russia‑Ukraine tensions remain front of mind,” said analysts at CBA in a note.
However, the note added that “the market reaction is modest so far because the Russian, European and U.S. actions have been flagged for some time.”

Investors now expect the Federal Reserve to hike interest rates due to higher raw material costs in the wake of the Russia-Ukraine tension.

On the data front, the U.S. will release new home sales, GDP, and initial jobless claims on Thursday.

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