Feb 21, 2022 02:45AM ET
By: AnalysisWatch
The U.S. dollar weakened in early European trading on Monday as risk sentiment was lifted by news of a likely meeting between U.S. President Joe Biden and Russian President Vladimir Putin to discuss the tense situation on the Ukrainian border.
At 9:45 ET, the dollar index, which tracks the greenback's exchange rate against a basket of six other currencies, was trading 0.3% lower at 95,745 points.
News of the possible summit came from the office of French President Emmanuel Macron, who proposed a meeting between the two heads of state. The White House said in a statement that Biden agreed to the meeting but only if there was no invasion, while the Kremlin would not comment on the issue.
The dollar has been the main beneficiary of rising tensions on Ukraine's border in recent weeks, with Russia deploying troops and conducting military exercises in neighboring Belarus while Ukrainian troops and Russian-backed rebels in the east of the country have accused each other of violence.
The EUR/USD rose 0.5 percent to 1.13773 points, as the prospect of a diplomatic victory boosted the euro. The USD/JPY fell 0.1 percent to 114.96 after reversing early gains, while the riskier AUD/USD rose 0.6 percent to 0.7217.
The Russian ruble, which is sensitive to the prospect of war, rose while the USD/RUB fell 0.9% to 76.6073.
Meanwhile, the US market will remain closed on Monday for the President's Day holiday, but expectations of aggressive moves by the Federal Reserve to combat consumer inflation at a 40-year high continue to support the dollar.
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