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Forex
25 Jan 2022
Dollar Approaches Two-Week High amid Geopolitical Tensions and Hawkish Fed Policy
The Index Today
The dollar climbed in Asia on Tuesday morning, reaching a two-week high amid persisting concerns over a hawkish Fed monetary policy and geopolitical tensions between Ukraine and Russia.
The U.S. Dollar Index rose by 0.04% to 95.935 by 4:23 am GMT. While the AUD/USD pair climbed by 0.03% to 0.7142, the USD/JPY pair dropped by 0.17% to 113.72. The NZD/USD pair dropped by 0.33% to 0.6676, as did the USD/CNY and GBP/USD pairs to 6.3297 (0.02%) and 1.3477 (0.06%) respectively.
The U.S. Federal Reserve is expected to reveal its policy decision on Wednesday which could provide hints on the schedule of interest rate hikes set to be implemented in 2022. The first of the rate hikes is poised to come into effect as early as March with additional three hikes to be instituted this year.
NAB’s Attrill says of the Ukraine-Russia tensions, “The geopolitical risk has just added a new layer of safe-haven support." This comes as NATO announced its decision to fortify Eastern Europe with additional defense support which has been decried by Russia.
