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The dollar reached a 20-year high amid Putin's statement

September, 21 2022
watermark Economic news

The US dollar paired with the euro on Wednesday jumped to a new 20-year high at 0.9884. The rise occurred after Russian President Vladimir Putin signed a decree on partial mobilization in the country, which significantly increased the overall geopolitical tension in the world.

On this news, the dollar index, which tracks the value of the US currency against a basket of other major currencies, rose by more than 0.5% to 110.87, the highest level since 2002. In general, since the beginning of the year, the dollar index has grown by almost 16% and is aiming for the most significant annual growth since 1981.

It is noted that European currencies suffered the most, as Putin's statements exacerbated concerns about the economic prospects of Europe, which has already suffered seriously due to restrictions on Russian gas supplies. The British pound/US dollar pair fell to a new 37-year low of 1.1304 even before Putin's speech. 

The Australian dollar/US dollar pair fell to 0.6655, the lowest since June 2020, and the New Zealand dollar/US dollar pair fell to 0.5877, the lowest since April 2020.

Analysts note that concerns about the escalation of the conflict are hurting European currencies, and if the US Federal Reserve continues to tighten its monetary policy today, their decline may continue. According to the results of today's meeting, the Fed is expected to raise rates by 0.75 percentage points for the third time in a row.

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