The euro rose slightly in Asian trade. However, after two sessions of sharp loss, it continued to bleed; Tensions in Eastern Europe pushed up demand for the dollar and a safer yen. Central bank policy was also crucial for investors. The Bank of Japan said it would not “often” buy government bonds. This even complicates the situation for investors after the BOJ defended its bond yields on Monday.
The euro was at $1.1320. On Tuesday, it was up 0.12%, up from $1.1278 the previous day. This was the lowest in the last week and a half. The yen was at $115.4; After hitting 114.99 on Monday, the strongest was Sunday. The movements were slightly more cautious elsewhere. The overall result was that the dollar index was 96,185, down 0.1% overall.
Investors were alarmed last night by the President of Ukraine, who called on citizens to fly the country’s flags from buildings and sing the national anthem on 16 February. The media named this date a possible start to the Russian invasion. However, Ukrainian officials stressed that Zelensky did not predict an attack on that date. Representatives of the US Federal Reserve continue to argue over how aggressively they should raise future interest rates at the March meeting.
Fed Talks
A Hawkish Fed official called for a significant 50 basis point increase; The call for interest rate growth was repeated on Monday. Other officials, however, were more cautious in their public remarks.
Tensions in Ukraine and a more aggressive outlook on the Fed’s funds rate boost the dollar in the near term. Trade has been slightly weak in the last day or two, which indicates that the markets are well aware of what is happening on the Ukrainian border. The haven yen usually benefit when investors are nervous. The contrast between the rise in US interest rates and the stability of the Bank of Japan should bring the yen down. Sterling was unchanged at $1,354. The Australian dollar changed slightly to $0.7129. The Russian ruble was stable and then rose 1.1% overnight. Bitcoin was 2.4% higher in cryptocurrencies and traded at around $43500.
