The dollar rose once morest the euro on Wednesday as investors worried regarding the impact of the escalating conflict in Ukraine on the economic outlook for the euro zone, while commodity-linked currencies consolidated gains.
The Russian ruble continued its decline to a new low once morest the backdrop of the severe damage caused to the Russian financial system by harsh Western sanctions following Moscow’s invasion of Ukraine.
“Evolution related to the war in Ukraine will continue to be the main driver of euro prices during the session,” said Shaun Osborne, senior exchange market analyst at Scotia Bank.
“The continued escalation of the conflict with the absence of clear solutions for Russia will push the euro towards the 1.10 barrier in the coming days,” he added.
The euro was down 0.3 percent once morest the dollar, following falling to a 21-month low of 1.1059 earlier in the session.
Meanwhile, US Federal Reserve Chairman Jerome Powell said on Wednesday that the Fed would press ahead with plans to raise interest rates this month in an attempt to curb inflation, even though the outbreak of war in Ukraine made the outlook “very foggy”.
The dollar index, which measures the performance of the US currency once morest a basket of six major currencies, rose 0.3 percent to 97.604. The index had jumped to 97,834, its highest level since June 2020, earlier in the session.
Commodity-linked currencies, including the Canadian, Australian and New Zealand currencies, have boosted their value as investors anticipate that they will benefit from higher commodity prices.
The Australian dollar rose 0.19 percent, the New Zealand dollar 0.2 percent and the Canadian dollar 0.4 percent.
Rising investor appetite for riskier currencies kept the Swiss franc and Japanese yen, two of the safe haven currencies, under pressure, with the dollar gaining 0.2% once morest the franc and 0.5% once morest the yen.
(Archyde.com)
