The dollar rises against competitors and goes to an all-time high against the ruble

Credit: Marcelo Casal Jr. / Agência Brasil

Currencies: The dollar is rising against competitors and going to an all-time high against the ruble (Credit: Marcello Casal Jr/Agência Brasil)

The dollar rose against most of its rivals on Monday 28, with a new takeoff for the security of the US currency amid the ongoing military conflict in Ukraine and the application of new sanctions on the Russian economy in response to the directed invasion. from Moscow. The initial impact of the measures led the Russian Central Bank to raise interest rates from 9.5% to 20% per year and adopt capital controls, causing a sharp drop in the ruble, which fell to the lowest level against the dollar in the whole story. .

The DXY index, which measures the dollar’s divergence against six rivals, rose 0.09% to 96.707 points. In the late afternoon in New York, the euro slipped to $1.1218, the pound fell to $1.3411, and the dollar fell to 114.96 yen. The Japanese currency is also a safe haven for the markets in times of extreme volatility.

The US Treasury has announced a new set of sanctions banning citizens of the country from engaging in transactions with the Russian Central Bank, Russia’s National Wealth Fund and the country’s Ministry of Finance. In addition, Canada, Switzerland, Japan and the United Kingdom also announced new restrictions.

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In this scenario, the ruble showed a strong decline against the dollar. In the late afternoon in New York, the dollar rose to 109,049 rubles. According to Capital Economics, sanctions against the Russian Central Bank have frozen a large part of its foreign currency assets, rendering at least half of them unusable. “Policy makers may need to allow the ruble to fall further,” he says in a report sent to clients. For Oxford Economics, even as the Russian Central Bank raises interest rates, this is unlikely to outweigh the risks of holding ruble assets, even for Russian citizens.

Investors also followed comments from Atlanta Federal Reserve Chairman Rafael Bostic, who argued that the US central bank should drop its easing stance and raise interest rates to a “reasonable” level. The official defended a 25 basis point increase in the federal funds rate at the March meeting, but left open the possibility of a 50 basis point rate hike.