Russia – Ukraine Tension: US Dollar Gains As Tension Rise After US Warning
Share on facebook
Share on twitter
Share on telegram
Share on whatsapp
asian market, benefits, forex, trading, trade

Author: Amar – Technical Analysts

The dollar rose along with other safe-haven assets on Friday after the United States said Russia has massed enough troops near Ukraine to launch a major invasion. Russia could invade Ukraine at any time and might create a surprise pretext for an attack. German Chancellor Olaf Scholz, who heads to Kyiv and Moscow for talks with President Vladimir Putin tomorrow, warned of sanctions if Moscow did invade. The flashpoint adds to stress already evident in markets’ volatile response to more than expected US inflation data last week, and although concern about an emergency rate hike has subsided analysts expect the dollar to stay supported.

The dollar’s rise was due to Sullivan’s comments, as well as reports that Russian President Vladimir Putin had decided to invade Ukraine, which the White House later disputed. With Fed hike expectations surging again and geopolitical tensions in Ukraine escalating dramatically the dollar index should be back on the front foot again. The greenback had struggled to pick a direction earlier in the day. Later on, today, European Central Bank President Christine Lagarde addresses European Parliament and St Louis Fed President James Bullard, who roiled markets with hawkish comments in the wake of last week’s inflation data.

Biden and Putin spoke by phone amid high tension over a Russian military buildup near Ukraine that has fueled fears of a looming invasion. Russia has repeatedly denied any such plans. Biden predictably mentioned possible tough anti-Russian sanctions in the context of the tense situation around Ukraine, but that was not the focus of his rather lengthy conversation with the Russian leader. Biden’s ideas largely repeated the ideas set out in the US and NATO counter-proposals to Russia’s security demands. According to a spokesperson from Russia, Russia had practically finished drawing up its response to those counterproposals and would announce them soon.