DOLLAR SOARS, EURO SINKS: US DOLLAR INDEX ANALYSIS AFTER SANCTIONS ESCALATIONS
Share on facebook
Share on twitter
Share on telegram
Share on whatsapp
asian market, benefits, forex, trading, trade

Author: Mr. Amar – Technical Analyst

The US dollar rose in early European trade on Monday, while the ruble fell to a record low as Western sanctions against Russia over its invasion of Ukraine boosted demand for the world reserve currency. Western powers escalated the pressure on Russian President Vladimir Putin by blocking over the weekend several major Russian banks from using the global SWIFT payment system.

These actions significantly disrupt Russia’s access to the global financial system, preventing the Central Bank of Russia from defending the falling ruble and cutting off the government from cross-border purchases and financing.

The US Dollar Index (DXY) bulls appear to be in control as the pair consolidates after a breakout and made a new high at 97.50 last week, breaking off the top line of a five-month rising wedge. This could prompt central banks, and the Federal Reserve, in particular, to improve liquidity to make up for missed payments.

In view of the extreme volatility of the market, investors will be considered this week in the certificate of profitability and monetary policy by the Presidency of the Fed Jerome Powell before the Ministry of Financial Services of the House of Representatives on Wednesday and again before the Banking of the Committee of the Senate on Thursday.