- Dollar rises on fears over Ukraine
- Euro seen as vulnerable to possible escalation
- Dollar index at two-week high
(Updates to late U.S. market activity; adds Zelenskiy comments)
The U.S. dollar index reached a two-week high on Monday, with the index briefly jumping after Ukraine's President Volodymyr Zelenskiy commented on Russia and a possible invasion, adding to recent worries over tensions in the country.
Zelenskiy said he had heard that Wednesday could be the day of a Russian invasion, and would proclaim it a day of Ukrainian national unity instead. The leader has tended to play down suggestions that an attack is imminent.
The comment spooked investors, who have fled to the dollar and other safe-haven currencies amid the escalating geopolitical problem, but the dollar index appeared to quickly settle back to previous levels.
Washington earlier has said Russia could invade Ukraine "any day now," and British Prime Minister Boris Johnson on Monday called the situation "very, very dangerous."
"The big driver clearly is tensions in the Ukraine. Markets are in risk-off mode across the board. Implied volatilities are up," said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.
The dollar index =USD was last up 0.4% at 96.3430 after reaching 96.4410, its highest since Feb. 1. The dollar was up slightly against the yen at 115.56 JPY= , while the dollar was flat against the Swiss franc at 0.9256 franc. CHF=EBS .
Also boosting the dollar index were comments earlier Monday from St. Louis Federal Reserve president James Bullard, who reiterated calls for a faster pace of U.S. Federal Reserve interest rate hikes.
Bullard also said that four strong inflation reports in a row warranted action. Last week's stronger-than-expected U.S. consumer price index report has driven speculation the Fed might raise rates by a full 50 basis points in March.
"Clearly we still have the after shocks of last week's inflation report and St. Louis Fed president Bullard's comments," Schamotta said. "We have traders positioning for a front-loaded tightening cycle."
The move into safe-haven assets has overshadowed expectations for monetary policy tightening from the European Central Bank. ECB president Christine Lagarde also recently reiterated that any policy action will be gradual.
Against the dollar, the euro was down 0.4% at $1.1296. EUR= The Fed will release its January meeting minutes on Wednesday. In cryptocurrencies, bitcoin was flat at around $42,080 BTC=BTSP .
======================================================== Currency bid prices at 3:17PM (2017 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 96.3430 95.9330 +0.44% 0.711% +96.4410 +95.9040 Euro/Dollar EUR=EBS $1.1296 $1.1346 -0.44% -0.64% +$1.1369 +$1.1280 Dollar/Yen JPY=EBS 115.5600 115.5200 +0.05% +0.40% +115.7450 +115.0200 Euro/Yen EURJPY= 130.53 130.97 -0.34% +0.16% +131.3900 +130.0500 Dollar/Swiss CHF=EBS 0.9256 0.9255 +0.02% +1.48% +0.9272 +0.9239 Sterling/Dollar GBP=D3 $1.3524 $1.3561 -0.27% +0.00% +$1.3571 +$1.3495 Dollar/Canadian CAD=D3 1.2734 1.2739 -0.03% +0.72% +1.2784 +1.2720 Aussie/Dollar AUD=D3 $0.7122 $0.7137 -0.21% -2.02% +$0.7150 +$0.7087 Euro/Swiss EURCHF= 1.0454 1.0502 -0.46% +0.82% +1.0514 +1.0438 Euro/Sterling EURGBP= 0.8352 0.8369 -0.20% -0.60% +0.8386 +0.8347 NZ NZD=D3 $0.6614 $0.6653 -0.62% -3.40% +$0.6649 +$0.6593 Dollar/DollarDollar/Norway NOK=D3 8.8950 8.8700 +0.38% +1.07% +8.9490 +8.8695 Euro/Norway EURNOK= 10.0482 10.0607 -0.12% +0.35% +10.1251 +10.0321 Dollar/Sweden SEK= 9.3934 9.3273 +0.19% +4.16% +9.4499 +9.3030 Euro/Sweden EURSEK= 10.6122 10.5918 +0.19% +3.70% +10.6917 +10.5743 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ EUR-ECB https://tmsnrt.rs/3sD4waXWorld FX rates https://tmsnrt.rs/2RBWI5E
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