Title: Dollar Down, Hopes for Ukraine War De-Escalation Gives Euro a Boost
Mar 29, 2022 11:36PM ET
The dollar weakened in Asia on Wednesday morning, while hopes for a breakthrough in peace talks between Russia and Ukraine boosted the euro. The Japanese yen, already under pressure, stabilized even as the Bank of Japan (BOJ) continues its efforts to push down bond yields.
The US dollar index, which tracks the greenback against a basket of other currencies, fell 0.32% to 98.125 by 11:28 PM ET.
The USD/JPY pair fell 1.09% to 121.50. Japanese data released earlier in the day showed retail sales fell 0.8% year-on-year in February 2022.
The AUD/USD pair gained 0.13% to 0.7516, and the NZD/USD pair rose 0.45% to 0.6964.
The USD/CNY pair declined 0.06% to 6.3604, while the GBP/USD pair gained 0.16% to 1.3106.
The euro has been heavily weighed down in recent weeks on fears about the economic impact of the war in Ukraine. Fears that the war could spread westward led the single currency to hit a two-week high of $1.1137 overnight before settling back at $1.1091 in Asian trading. It also hit a three-month high of 84.81 pence against the pound, while the Russian rouble climbed to a one-month high of 83.50 to the dollar.
At the face-to-face talks in Istanbul on Tuesday, Russia pledged to reduce military operations around the Ukrainian capital, Kyiv, while Ukraine proposed adopting a neutral status. But the US warned that the threat to Kyiv remained, dashing optimism for an end to the war that began with the Russian invasion on February 24th.
Increased risk appetite boosted risk-sensitive currencies, including the Australian and New Zealand dollars. Antipodean currencies held just below recent highs in Asian trading and the South Korean won, hit by the recent surge in oil prices, posted its best overnight in two years.