USD and JPY Surges as Ukraine Remains a Concern

A Gain and More

The US dollar gained up on Friday in the early Asian trading hours, but the safe-haven Japanese Yen pulled a surprise by gaining more ground over the US dollar following the US President’s statement, which accuses Russia of clandestine preparations to justify an eventual invasion of Ukraine.

USD/JPY price chart. Source TradingView

The American dollar index that monitors the market giant against other major currencies in the stock market gained upward by 0.02% to reach 95.825. But for the week overall, the dollar has slipped by 0.5% thus far.

That USD/JPY went up by 0.22% to 115.19, the AUS/USD pair was up by 0.24% to 0.7200, and the NZD/USD pair went up 0.33% to 0.6709. USD/CNY dipped by 0.03% to 6.3354 while GBP/USD pair gained up 0.03% to 1.3609.

Commonwealth Bank of Australia analysts noted to clients that the level of support at 114.63 seemed within reach on Friday if there is more negative news from Ukraine. The markets were equally watching the Bank of Japan’s policy while the central bank kept its policy of controlling the yield curve. 

Potential War and Other Monies

There were reports of an exchange of hostilities between Ukrainian forces and Russian- backed secessionists on Thursday in what many feared was a breakdown of the ceasefire agreement between both sides of the conflict. This also brought fresh concerns of a potential Full-scale Russian invasion. The American President, Joe Biden, laid a firm accusation against Russia that it was preparing a condition to justify its planned attack.

The Eastern European situation also made the dollar lose position on the Swiss franc as the dollar was last seen on 0.9196 Swiss francs. At the same time, Bitcoin was down to about a 2-week low point at $40500. The Head of Research at Pepperstone, Chris Weston, said in an email that crypto is revealing to us once more that a very high-risk asset with a sinister outlook might morph to become something quite ugly later on.

The Euro continues to be volatile as the Ukrainian crisis continues, and the regional fiat currency was trading at $1.1360 at the time of putting this together. The British pound, on the other hand, was boosted by speculations that the Bank of England would introduce tighter monetary policies in the course of the year.

The Bank of Japan’s offer to purchase a limitless amount of a ten-year benchmark in government bonds early this week has put central banks and their recent hawkish monetary policies under careful analysis. Though the market has not seriously tested the Bank of Japan’s 0.25% yield on those bonds to be purchased, yields on other related tenors have, however, been rising. 

Whereas, the argument on how much the Federal Reserve should increase its interest rates, whether 25 bps or a 50 bps, in March continues to rage.    

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