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The dollar had been trading mostly sideways until the US caution about Russia’s invasion of Ukraine hit markets. The dollar index, which gauges the US currency’s value against six major currencies, rose 0.258 per cent.
At the same time, the dollar and other safe-haven assets rose on Friday as the United States reported Russia had collected enough troops near Ukraine to launch a major invasion.
Crude futures in the United States soared more than 5% to $94.66 per barrel, the highest level since 2014, while gold jumped more than 2% to a near two-month high at one point.
According to White House National Security Adviser Jake Sullivan, a Russian strike may begin at any time and would most likely begin with an air assault.
The dollar rose in response to Sullivan’s words, as well as rumours that Russian President Vladimir Putin had chosen to invade Ukraine, which the White House later disputed.
Washington ordered that all citizens of the United States leave the country within 48 hours. Other countries have warned their citizens to leave Ukraine immediately, including the United Kingdom, Japan, Latvia, Norway, and the Netherlands.
The surge in the dollar, together with advances in other safe-haven assets such as US Treasuries and the Japanese yen, indicates that the market is growing increasingly concerned about the possibility of an invasion. The Japanese yen surged 0.63 percent versus the US dollar to 115.29 per dollar, while the Canadian dollar plummeted as risk-sensitive assets sold down in response to worries of a Russian invasion. The market’s uncertainty over how interest rate rises would go has contributed to frantic sessions this week, as the dollar remained uncertain about its future.
Russia’s ruble, which was already down for the day, plummeted even further as a result of the news. The rouble was recently down 2.73 percent against the dollar, trading at 77.00 per dollar.
Meanwhile, the euro fell as markets absorbed the news, and it was on track for a weekly loss after European Central Bank President Christine Lagarde stated in an interview that hiking rates now would not reduce record eurozone inflation but would instead harm the economy.