The US dollar rose on Friday, after the US said that Russia has massed enough troops near Ukraine to launch a major invasion.
A Russian attack could begin any day and would likely start with an air assault, US National Security Adviser Jake Sullivan told a media briefing.
The US dollar had been trading mostly sideways when the US warning hit markets.
Photo: Reuters
The US dollar index, a measure of the greenback against six major currencies, rose 0.5 percent to 96.03, posting a weekly increase of 0.57 percent.
The US dollar’s rise was due to Sullivan’s comments, as well as reports that Russian President Vladimir Putin had decided to invade Ukraine, which the White House later disputed, said Bipan Rai, head of FX strategy at CIBC Capital Markets in Toronto.
That move up, along with moves in other safe-haven assets such as US Treasuries and the Japanese yen, indicates the market is growing more and more concerned about the prospect of an invasion, Rai said.
“It’s definitely a safe-haven move,” he said.
The New Taiwan dollar declined against the US dollar on Friday, losing NT$0.021 to close at NT$27.846. It was down 0.02 percent from US$27.841 on Monday last week. The markets were closed until then due to the Lunar New Year holiday.
The Japanese yen gained 0.63 percent versus the greenback to ￥115.29, while the Canadian dollar weakened as the potential for an imminent Russian attack triggered a sell-off in risk-sensitive assets. Russia’s currency, already lower for the day, fell further on the news to 76.79 rubles per US dollar.
Washington urged all US citizens to leave Ukraine within 48 hours. Other countries — including Britain, Japan, Latvia, Norway and the Netherlands — told their citizens to leave Ukraine immediately.
The euro weakened as markets processed the news to 0.88 euros, and posted a weekly decline of 0.87 percent after European Central Bank President Christine Lagarde said in an interview that raising rates now would not bring down record eurozone inflation and would only hurt the economy.
The greenback had struggled to pick a direction earlier in the day as investors digested the University of Michigan’s preliminary consumer sentiment index for this month.
That report found that US consumer sentiment fell to its lowest level in more than a decade early this month amid expectations that inflation would continue to rise in the near term.
Economists polled by Reuters had forecast the index edging up.
The market’s lack of clarity as to how interest rate hikes might progress has contributed to frenzied sessions this week as the US dollar remains undecided on the future, Wells Fargo Securities currency strategist Erik Nelson said.
“I tend to think we consolidate in the short term here, and am still biased toward euro downside, dollar upside against most currencies,” he said.
Additional reporting by staff writer and CNA
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