The U.S. dollar, a traditional safe haven in times of crisis, rose to its highest level in 20 years on Wednesday after Vladimir Putin announced a partial military mobilization.
Also, traders expect a new significant increase in the base interest rate from the US Federal Reserve, according to Reuters information, Agerpres.
The dollar index, which measures the U.S. currency’s performance against a basket of six other currencies, rose 0.5% to 110.87 points, its highest since 2002.
The euro fell after Putin’s announcement of partial military mobilization
In contrast, European currencies were hit, with the euro down 0.56% to $0.9913 and the pound down 0.31% to $1.1345, having previously fallen 1, to $1304, its lowest in 37 years.
Russia’s president announced on Wednesday “Partial Mobilization” of AllotteesThe war has paved the way for a major escalation of the conflict in Ukraine as it enters its seventh month and Moscow is losing ground on the battlefield.
Russia will mobilize 300,000 quotas
Later, Defense Minister Sergei Shoigu said Russia would mobilize 300,000 reservists to bolster its troops in Ukraine.
“Obviously we have a situation where investors are moving towards safe-haven values, and we also have expectations that we will see another interest rate hike today from the central bank. So the dollar was already strong and Ukraine’s proximity to European countries is making people think about what the situation will be like if the war in Ukraine escalates. So This is a double-edged sword, affecting the euro, pound and dollar differently“, praised Danny Hewson, financial analyst at AJ Bell.
According to analysts, the Federal Reserve’s decision-making body, the Monetary Policy Committee, will announce a fresh increase in the key interest rate on Wednesday, the fifth increase in borrowing costs since March, when inflation hit its highest level. Over the past 40 years.
Most analysts expect the announcement of a 75 basis point increase in the benchmark interest rate, but a 100 basis point (-a percentage point-no.) increase has not been completely ruled out by analysts.
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