US dollar soars on Ukraine invasion

Nervous investors snap up US dollars

The US dollar has moved sharply higher in Asia as investors pile into US treasuries and park their funds in a defensive US dollar position. The dollar index has risen another 0.30% to 96.50. Unsurprisingly, the euro has borne the brunt of the selling, EUR/USD falling 0.50% to 1.1250. GBP/USD has fallen to 1.3525. Key risk sentiment indicators, the Australian and New Zealand dollars, are 0.70% lower.

Asian currencies have also fallen, and the impending inflationary shock will impact Asia more than most as huge net energy importers. The INR, THB, KRW, SGD, PHP, and INR are 0.50% lower with the MYR down just 0.25%. Unsurprisingly, USD/CNY is almost unchanged.

Like equity markets, it is hard to find any reasons for the selloff to reverse now that it appears the tanks are rolling. Stronger sanctions are to come on Russia and energy prices will inevitably head higher in the short term. Only the Swiss franc and the Japanese yen are likely to hold their own as fellow haven currencies.

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