The dollar rose on Thursday. Lack of progress in Russia-Ukraine peace talks boosted demand for a haven currency; The U.S. announced the most significant release from its emergency oil reserves to alleviate the energy shock of the war. The dollar index, which balances the dollar from six global baskets, rose to 98.31, 0.492%. The dollar attracted safe flows after Russia invaded Ukraine on February 24. About 1.6% in March; And will increase by about 2.8% for the first quarter.
Flows at the end of the month and quarter caused additional market variability. However, trading should slow down on Friday until the U.S. reimburses any wages. U.S. President Joe Biden has announced that from May, the U.S. will produce 1 million barrels of crude oil per day from the Strategic Oil Reserve for six months.
Biden said the administration worked with allies in the IEA to coordinate production, which will reach a total volume of more than 1 million barrels per day in global markets. Crude oil prices, which have risen due to the war, have fallen due to current news.
Dollar and Russia-Ukraine Tension
Commodity currencies such as the Australian and New Zealand dollars declined; the Australian exchange rate by 0.34% and up to 0.74845 USD; While the kiwi fell 0.57% to a total of $0.6931. Earlier in the week, hopes that peace talks would lead to a ceasefire in Ukraine five weeks after Russia’s invasion were dashed. Ukrainian forces are preparing for new Russian attacks in the country’s southeast. Peace deals should continue on Friday.
This triggered a risk-off reaction that led to stock exchanges falling. Russian President Vladimir Putin said foreign buyers should pay for Russian gas in rubles on Friday. Russia is trying to respond to Western sanctions over its invasion of Ukraine.
Western companies and governments have rejected any move to change their gas supply contracts to other payment currencies. Most European buyers use the euro. The euro stood at $1.1068, down 0.8% overall; Since the beginning of the session on March 1, it has reached the maximum of $1.1184. Rising inflation in Europe raised expectations of a rate hike.
According to the chief economist of the European Central Bank, eurozone inflation is increasingly likely to stabilize at around 2%; However, the ECB must be prepared to change course if the outlook worsens due to the war in Ukraine. Analysts say the ECB is likely to be hesitant to commit “how to take action against inflation.” As a result, there will also be some time before the euro rises sustainably.