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Title: Dollar Up, Set for Best Month Since 2015 as Investors Seek Safety

Apr 26, 2022 11:46PM ET

By: AnalysisWatch

The dollar strengthened in Asia Wednesday morning, reaching its highest level since the start of the COVID-19 pandemic and facing its best month since 2015. The prospect of aggressive interest rate hikes in the U.S. and a turn to safe-haven assets due to slowing economic growth in China and Europe also boosted the U.S. currency.

By 11:35 p.m. ET, the US dollar index, which measures the greenback against a basket of other currencies, was up 0.02% at 102.335, close to its overnight high of 102.37, the highest level since March 2020.

The USD/JPY pair rose 0.43% to 127.77.

The AUD/USD pair rose 0.7% to 0.7170 and the NZD/USD pair gained 0.15% to 0.6572.

The USD/CNY pair decreased 0.03% to 6.5551 and the GBP/USD pair increased 0.06% to 1.2580.

Meanwhile, the euro fell below its COVID-19 lows in early trading, hitting a five-year low of $1.0635.

Concerns over energy security and economic growth in Europe are growing after Russia's Gazprom announced earlier in the day that it would cut off gas supplies to Poland and Bulgaria.

Commodity currencies also saw limited gains, with the New Zealand dollar approaching its previous low of 2022 and the Australian dollar posting a two-month low.

Data released earlier in the day also showed that Australia's consumer price index rose 2.1% quarter-on-quarter and 5.1% year-on-year in the first quarter of 2022.

The yen also benefited from the flight to safety, and the Japanese currency rose from recent lows to a one-week high. The yen also had its best day in more than two years against the pound.

The pound fell more than 2% against the dollar last week after worse-than-expected retail sales data prompted a rethink on the U.K.'s interest rate outlook. It hit a new 21-month low on Wednesday.

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