The dollar jumped to a 20-year high on rising geopolitical risks

The dollar jumped to a new 20-year high, Reuters reported. News of the announcement of partial mobilization in Russia led to a rise in the dollar index, which measures the value of the dollar against six other major world currencies on the international Forex market.

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Trading on the stock exchange

In trading on September 21, the dollar index DXY rose more than 0.5% to 110.87, the highest level since 2002. As of 12:37, the index added 0.4% and traded at 110.62.

The dollar index (DXY) shows the value of the US dollar against a basket of currencies of the countries that are the main trading partners of the US. It includes Euro, Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc. The index is calculated by the Intercontinental Exchange (ICE).

The euro fell to a two-week low of $0.9885. As a result, the single European currency came close to a two-decade low. The British pound fell 0.4% to a new 37-year low of $1.1304.

Read: Forecast of the euro exchange rate in Ukraine after the decision of the US Fed: why a collapse of quotations is possible

The Australian (AUD) and New Zealand (NZD) also hit multi-year lows against the US dollar. The Australian dollar fell to a low of $0.6655, the lowest since June 2020, while the New Zealand dollar fell to $0.5877, the lowest since April 2020.

“Headlines from Russia are overshadowing the Fed, at least for now,” Societe Generale currency strategist Kenneth Brooks said. Fears about the escalation of the conflict in Eastern Europe are hurting European currencies, and if the Fed tightens monetary policy sharply today, the fall of these currencies could intensify, according to an expert.

Decision of the Fed

On Wednesday at 9:00 p.m., the US Federal Reserve, which acts as the country’s central bank, will announce its decision on the interest rate following a two-day meeting on September 20-21.

Most analysts polled by Reuters expect the Fed to raise interest rates by at least 75 bp. for the third time in a row.

The value of the dollar in relation to six other currencies has increased by almost 16% this year. This is the biggest annual jump since 1981.

According to Reuters, since the beginning of the year, the US dollar has lost about 22% against the ruble, and the Brazilian real has lost 8.3%. The US dollar fell by 2.5% against the Mexican peso.


The article is in Ukrainian

Tags: dollar jumped #20year high rising geopolitical risks

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