© Reuters
by Peter Nurse
Investing.com – The US Dollar Rises in the Afternoon while the ruble fell to a record low As Western sanctions against Russia for the invasion of Ukraine increase the demand for the dollar in the world.
At 3:05 AM ET (0805 GMT), the dollar index, which tracks the dollar against a group of six other currencies, was trading 0.5% higher at 97.115.
Western powers have increased pressure on Russian President Vladimir Putin by removing several of Russia’s major banks from using the global SWIFT payment system over the weekend.
“Swift cuts will lead to massive missed payments and overdrafts similar to the massive missed payments and overdrafts we saw in March 2020,” analysts from SWIFT said. Credit Suisse said on Sunday.
This could drive the central bank and in particular the Federal Reserve. Increased liquidity to compensate for missed payments Swiss bank added
Additionally, both the European Union (EU) and the United States have announced moves that resulted in more than half of the Russian central bank’s foreign reserves being suspended.
This results in traders seeking dollars. world reserve currency Main safe-haven and most liquid assets
On the other hand, the ruble fell to a record low against the dollar on Monday. prompting the Russian central bank to raise the main interest rate to 20% from 9.5% by companies has called for the sale of foreign currency in an effort to protect the currency.
As of 2:55 AM ET was up more than 11% to 92.7400, having previously climbed as high as 117.8170, a new all-time high.
Russia’s economy is likely to shrink 20 percent in the second quarter and about 3.5 percent for the full year due to these intense sanctions, JPMorgan said on Monday.
“Two pillars of the economy even amid slowing growth rising inflation And the high interest rate is a reserve that is like a “fortress” of the Russian Central Bank forex. And the Russian current account surplus is no more,” added JPMorgan (NYSE:).
due to severe market volatility Investors will look this week at a testimony on the economy and monetary policy by Fed Chairman Jerome Powell. before the Financial Services Council Committee on Wednesday. and again before the Senate Banking Committee on Thursday.
The Federal Reserve is widely expected to raise interest rates at its next meeting in March. That could be as much as 50 basis points, but officials must now weigh the political, geopolitical and economic impact of the conflict in Ukraine on plans to curb rising inflation.
The currency fell 0.7% to 1.1187, with Europe being severely hit by the Russian army’s entry into Ukraine. Higher energy costs are likely to affect growth in the region. The Polish currency Zwot fell sharply, falling 1.6% against and 2.4% against.
It fell 0.1% to 115.52, with the yen seeing some safety tide. But factory output fell 1.3% in January. This has raised concerns that the economy will contract in the quarter as public health restrictions affect economic activity.
The risk-sensitive currency was down 0.4% to 0.7202, down 0.2% to 1.3380, while down 0.1% to 6.3109.
Turkey’s also fell 1.3 percent to 13.8810 after Turkey’s economy expanded more than expected in the fourth quarter of last year, with GDP rising 9.1 percent, driven by domestic consumption and exports. rising out
