On Wednesday, the US dollar pulled back as markets paused for breath while monitoring the latest developments over the Ukraine crisis.
The USD index, which trails the greenback against its six rival currencies, slashed 0.08% to 95.94.
Accordingly, Russia-Ukraine tensions are still on traders’ radar as the West imposed sanctions on Moscow.
On late Tuesday, US President Joe Biden took measures that targeted Russian elites and the sale of sovereign debt.
This punitive action came after Russian President Vladimir Putin commanded troops in two breakaway regions in eastern Ukraine.
The American State Department explained that the sanctions are to punish Russia’s economy but not to hit energy markets.
Moreover, the German government halted a significant gas pipeline project from Russia.
Nevertheless, the recent soaring energy prices were partly the result of the situation in Ukraine.
Subsequently, Oil edged up to $96.00 per barrel yesterday, reaching its highest level since 2014.
In line with this, investors anticipated the Federal Reserve to hike interest rates due to higher raw material costs.
They also looked forward to the release of a slew of economic data on Thursday.
Economists expected the fourth-quarter gross domestic product to increase 7.00% from the previous 6.90% result.
An upturn from the projected reading could fuel gains for the US dollar.
At the same time, they also anticipated American new home sales to decline to 806,000 from the prior 811,000.
Then, the forecasted initial jobless claims inched down to 235,000 from the last result of 248,000.
Meanwhile, the Australian dollar strengthened 0.57% to 0.73 against the US dollar amid the rising commodity prices.
Similarly, the Canadian dollar rallied 0.49% to 1.13 versus its American counterpart. The sky-high oil prices, one of Canada’s major exports, supported the loonie.
Euro Edges Higher Versus US Dollar
Furthermore, the single currency euro rose 0.12% to 1.13 versus the greenback.
Markets turned their focus to the eurozone’s consumer price index report today. Forecasts for the inflation rate in January posted at 5.10%, slightly higher than the past 5.00% record.
Likewise, the Pound sterling jumped 0.13% to 1.36 as the Swiss franc elevated 0.05% to 1.27.
Conversely, the Japanese yen skidded 0.03% to 115.10 as the Hong Kong dollar shed 0.03% to 7.80.
On the other hand, the kiwi dollar surged 0.94% to 0.68 after the Reserve Bank of New Zealand increased its interest rates.
It announced a 25.00 basis point hike to pick up inflation expectations, marking the third rise in a row.
