Around 6 p.m., the greenback jumped 0.88% to 0.9883 dollars for one euro and 0.42% to 1.1333 dollars for one pound. The yen remained more stable at 144.16 yen to the dollar.
The dollar jumped to a 20-year high on Wednesday against a basket of other major currencies, after President Vladimir Putin mobilized his reserve to fight in Ukraine and said he was ready to use “all means” to to defend oneself.
In addition to its safe haven status, the greenback is benefiting from bets on tight monetary policy ahead of a decision by the US Federal Reserve (Fed) expected later today, and the Dollar index, which compares it to currencies such as the yen, the euro or the pound, rose to 111.056 points, a record since 2002.
“It’s not a bluff”, hammered, with a serious face, Mr. Putin, accusing the Western countries of wanting to “destroy” Russia, of having recourse to “nuclear blackmail” against it and thus signifying that it was ready to use nuclear weapons.
US President Joe Biden meanwhile accused Russia of having “shamelessly violated” the founding principles of the United Nations Charter on Wednesday at the UN General Assembly.
“This war simply destroys Ukraine’s right to exist,” he said.
“Concerns over a potential escalation of the war in Ukraine, with the mobilization of hundreds of thousands of Russian reservists, is sending investors to safe havens,” summarizes Susannah Streeter, analyst at Hargreaves Lansdown.
The greenback jumped around 4:00 p.m. GMT (6:00 p.m. in Paris) by 0.88% to 0.9883 dollars for one euro and by 0.42% to 1.1333 dollars for one pound, even if the yen remained more stable at 144, 16 yen for a dollar.
The eyes of traders will then turn to the Fed meeting, the decision of which will be published after the end of trading in Europe.
The monetary institute is engaged in a fierce fight against inflation, and is careful to show the slightest sign of a slowdown in its rate hikes.
“Rates should be back to their highest level since 2008,” said Han Tan, an analyst at Exinity Group.
Checkers sterling
Beyond the meeting of the day, “if the Fed signals even stronger waves of rate hikes to come, there will probably be a new massive sale of risky assets”, warns the analyst.
Among the struggling currencies, the pound hit a 1985 low of $1.1305 earlier in the session, battered by the gloomy outlook for the UK economy.
The Bank of England (BoE) will release its monetary policy decision on Thursday, and is expected to continue raising rates to counter inflation.
Since her August meeting, new Prime Minister Liz Truss has promised support measures for households and businesses to deal with the severe cost of living crisis.
“This will probably reduce inflationary pressures in the short term, but could on the contrary strengthen them in the medium term”, warns Matthew Ryan, analyst at Ebury, who therefore expects a marked action from the BoE on Thursday.