Friday, March 29

US dollar firms on prospect of more sanctions over Ukraine


Article content

NEW YORK/LONDON — The dollar gained on Monday, rising for three straight sessions, as

Civilian killings in north Ukraine and the prospect of increased sanctions pushed investors to seek safety

in the greenback.

The US currency also continued to benefit from a strong non-farm payrolls report for March that backed

expectations for a hefty half a percentage point tightening by the Federal Reserve at next month’s meeting.

“The dollar is bouncing higher as geopolitical developments have darkened clouds over the global

Advertisement 2

Article content

economy,” said Joe Manimbo, senior market analyst, at Western Union Business Solutions in Washington.

“The buck was already enjoying jobs-inspired gains after solid hiring and lower unemployment cemented

hikes of super-sized US rate expectations this year.”

French President Emmanuel Macron called for new sanctions and said there were clear indications Russian

forces had committed war crimes in the town of Bucha.

The Kremlin denied any accusations related to the murder of civilians in the town.

German Defence Minister Christine Lambrecht said the European Union should discuss ending Russian gas

imports. Russia supplies some 40% of Europe’s gas needs.

In late morning trading, the dollar, which measures the greenback against a basket of peers rose 0.3% to

Advertisement 3

Article content

98.89.

Data on Friday showed US unemployment hit a two-year low of 3.6% last month, leading investors to

assess if the numbers would strengthen the Fed’s resolve to tackle inflation by lifting rates sharply.

The euro, which has been under pressure due to worries about the economic damage from the war

in Ukraine, fell 0.6% to 0.4% versus the dollar to $1.0988. Against sterling, the euro fell to a six-day

low and it was last down 0.6% at 83.73 pence.

“More sanctions of course also mean that the risk of energy disruptions in Europe rises, because of our

own sanctions or because Russia might get completely serious with its counter-sanctions rather than just

changing the payment mode for natural gas,” said Ulrich Leuchtmann, Commerzbank Head of FX.

Advertisement 4

Article content

“In my view the risk of significant euro weakness increases.”

Against the yen, the dollar rose 0.3% to 122.855 yen.

Kit Juckes, head of FX strategy at Societe Generale, said a 50bp rate hike was already priced in.

“CFTC data suggest the market has been rebuilding its long dollar position. That’s one reason the dollar

is making heavy work of rising any further just now,” he said.

Speculators’ net long bets on the dollar rose to an 11-week high in the latest week.

Fed funds futures on Friday have priced an 80% chance of a 50 basis point hike next month

while two-year US yields hit 2.4950%, their highest level since March 2019.

Markets in mainland China were closed for a public holiday, but in offshore trade the yuan was

Advertisement 5

Article content

kept under pressure by concerns over a lengthening lockdown in Shanghai, where authorities are seeking to

virus-tested all 26 million residents.

===================================================== ======

Currency bid prices at 10:40AM (1440 GMT)

Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 98.9310 98.6140 +0.34% 3.416% +98.9670 +98.5170

Euro/Dollar $1.0980 $1.1048 -0.59% -3.40% +$1.1054 +$1.0980

Dollar/Yen 122.8500 122.5450 +0.24% +6.71% +122.9450 +122.2800

Euro/Yen 134.89 135.32 -0.32% +3.51% +135.6800 +134.7700

Dollar/Swiss 0.9263 0.9256 +0.08% +1.55% +0.9281 +0.9247

Sterling/Dollar $1.3119 $1.3115 +0.02% -3.00% +$1.3136 +$1.3094

Advertisement 6

Article content

Dollar/Canadian 1.2486 1.2517 -0.24% -1.24% +1.2528 +1.2480

Aussie/Dollar $0.7522 $0.7498 +0.34% +3.49% +$0.7524 +$0.7483

Euro/Swiss 1.0169 1.0222 -0.53% -1.93% +1.0240 +1.0160

Euro/Sterling 0.8369 0.8422 -0.66% -0.37% +0.8430 +0.8370

NZ $0.6947 $0.6921 +0.39% +1.51% +$0.6954 +$0.6906

Dollar/Dollar

Dollar/Norway 8.6770 8.7425 -0.71% -1.47% +8.7615 +8.6515

Euro/Norway 9.5270 9.6572 -1.35% -4.85% +9.6744 +9.5052

Dollar/Sweden 9.4108 9.3683 -0.04% +4.36% +9.4490 +9.3556

Euro/Sweden 10.3341 10.3379 -0.04% +0.98% +10.3967 +10.3310

(Reporting by Gertrude Chavez-Dreyfuss in New York and Joice Alves in London; Editing by Ed Osmond, John

Stonestreet and Barbara Lewis)

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.



financialpost.com