©Reuters. FILE PHOTO: Australian dollars are seen in a photo illustration February 8, 2018. REUTERS/Daniel Munoz
By Chuck Mikolajczak
NEW YORK (Reuters) – The dollar rose on Wednesday while the euro weakened as oil prices soared again with U.S. President Joe Biden poised to announce, along with European leaders, new sanctions against Russia during his trip to Europe.
Biden is scheduled to arrive in Brussels later Wednesday on his first trip abroad since the war in Ukraine began, meeting European and NATO leaders in an emergency summit at the Western military alliance’s headquarters. The sources said the US package would include measures targeting members of the Russian parliament.
Commodity prices such as oil and wheat have risen as tensions in Ukraine rise, putting additional upward pressure on already high inflation due to supply chain bottlenecks. Rising inflation has prompted many central banks, including the US Federal Reserve, to take steps to control prices, such as raising interest rates.
“The flow of capital is going to be, I don’t want to be in Europe, it’s closer to Ukraine literally in the geographical sense, but it’s also the consequences of the sanctions, there’s a lot of money coming out of Europe.” and back to the United States,” said Huw Roberts, chief analyst at Quant Insight.
“If we get another round of sanctions, then people say the pushback in the West will fall on Europe disproportionately.”
The rose 0.097%, with the euro dipping 0.17% to $1.1008.
Crude prices rose more than 5% on Wednesday, supported by the halt in Russian and Kazakh crude exports.
The Russian ruble strengthened 8.65% against the dollar at 89.50 per dollar after hitting a one-month high of 87.50 after Russian President Vladimir Putin said Russia will seek payment in rubles for gas sales from “enemy” countries.
Federal Reserve Chairman Jerome Powell has raised the possibility of raising interest rates by more than 25 basis points at upcoming meetings, a more aggressive stance echoed by other policymakers, which has backed the dollar and has helped boost the yield on the benchmark 10-year US Treasury note. to more than 2.4%.
On Wednesday, San Francisco Fed President Mary Daly and Cleveland Fed President Loretta Mester became the latest Fed officials to signal a larger hike was coming at the May meeting of the Fed. central bank.
Jefferies on Wednesday updated his Fed forecast in light of Powell’s comments and now sees a 50 basis point rate hike at the May and June meetings, followed by 25 basis point hikes at the remaining 2022 meetings. .
The Japanese yen weakened 0.30% to $121.12 per dollar, while the British pound was last trading at $1.3207, down 0.42% on the day after hitting a three-week high. of $1.3298.
Inflation in Britain soared faster than expected last month to hit a new 30-year high with a year-on-year rise of 6.2%. British finance minister Rishi Sunak slashed taxes for workers and slashed fuel tax on the heels of the inflation data, as he sought to soften a severe cost-of-living cut against the backdrop of rapidly rising prices. and a slowdown in economic growth.
The yen has been weak against the dollar recently, with the currency falling to a new six-year low of 121.40 per dollar as their respective central banks’ paths have strayed. Bank of Japan Governor Haruhiko Kuroda said on Tuesday that the central bank must maintain ultra-loose monetary policy as recent cost inflation could hurt the economy.
In crypto markets, the latest fell 0.98% to $42,179.99.
The latter fell 1.32% to $2,962.69.