Demand for safe haven USD edges up
Monday 14 February, 2022
Daily Currency UpdateThe safe-haven US dollar gained against major currencies on Monday on concerns over a Russian attack on Ukraine and following comments from a central bank policymaker on interest rates. Demand for the US dollar has picked up against a basket of currencies since Friday afternoon and continued to edge up on Monday morning after the US and other countries advised their nationals to leave Ukraine.
USD has also seen a boost after data last week showing surging US inflation, which some investors think could prompt the US Federal Reserve to tighten monetary policy aggressively, starting with a 50-basis point interest rate hike in March rather than 25 basis points. Comments made by St. Louis Federal Reserve President James Bullard on Monday morning supported this as he made a case to "front-load" monetary tightening due to accelerating inflation.
The US Dollar Index was up 0.30% trading at 96.37 at the time of writing.
Key MoversThe euro and the pound struggled against the strengthening US dollar on Monday as news about an imminent Russian attack on Ukraine ramped up. EURUSD traded around 1.3041 while GBPUSD was around 1.3523 at the time of writing. The Canadian dollar regained some ground against the US dollar on Monday after a major US and Canadian trading route finally re-opened on Sunday evening following a six-day blockade by protesters against vaccine mandates. USDCAD was sitting at 1.27371 at the time of writing.
- EUR/USD: 1.1298 - 1.1365 ▼
- GBP/USD: 1.3498 - 1.357 ▼
- AUD/USD: 0.7087 - 0.7148 ▼
- USD/CAD: 1.2722 - 1.2782 ▲