Driven by the events in Ukraine and the interest rate hike, the dollar achieves a “historic” rise

Driven by the events in Ukraine and the interest rate hike, the dollar achieves a “historic” rise
Driven by the events in Ukraine and the interest rate hike, the dollar achieves a “historic” rise

The US dollar rose to a two-decade high against its major peers on Thursday, spurred by the Federal Reserve’s decision to raise interest rates and Russian President Vladimir Putin mobilizing more troops for the war in Ukraine.

The dollar index, which measures the currency against a group of six peers including the euro and the British pound, rose to 111.65 for the first time since June 2002.

The US currency also set new records against regional currencies from the Australian and New Zealand dollars to the offshore Chinese yuan and the Korean won, as well as the Singapore dollar and the Thai baht.

And the Federal Reserve issued new expectations showing that interest rates will peak at 4.6 percent next year without any cuts until 2024 after it announced, on Wednesday, to raise the interest rate by 0.75 percent, for the third time, to confront inflation in the country.

The interest rate range reached 3.00 percent -3.25%, as was widely expected.

The dollar was already buoyed by increased demand for safer assets after Putin announced he would call up reservists to fight in Ukraine and said Moscow would respond forcefully with all of its huge arsenal if the West continued what he called “nuclear blackmail” over the conflict there.

The two-year US Treasury yield reached a 15-year high of 4.132 percent in Tokyo trading.

“Both the Fed’s outlook and Russian headlines contributed to the dollar’s strength, which was particularly sharp against the euro and other European currencies,” Reuters quoted Shinichiro Kadota, chief forex strategist at Barclays in Tokyo.

The euro fell to its lowest level in 20 years at $0.9807, before trading down 0.23 percent on Wednesday at $0.9812.

The British pound fell to a 37-year low of $1.1225, and was last changed at $1.1233, down 0.3 percent from the previous session.

The Australian dollar fell 0.63 percent to $0.65915 after touching $0.65895, its lowest level since May 2020.

The article is in Arabic

Tags: Driven events Ukraine interest rate hike dollar achieves historic rise

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