Dollar hits two-week high on tensions over Ukraine

dollar index

Dollar Index is trading up 0.31% at 96.329

The dollar rose on Monday along with the yen and Swiss franc as investors rushed into safe-haven assets on fears that Russia is preparing to invade Ukraine.

Russia could make such a move at any time and might create a surprise pretext for an attack, according to the United States, which reaffirmed on Sunday a pledge to defend “every inch” of NATO territory. Moscow denied any such plans and has accused the West of “hysteria”.

The dollar index rose 0.4% to 96.328, its highest since Feb. 1.

Euro-dollar one-month implied volatility was at 7.6%, from below 6% at the end of January.

The rouble was 0.1% lower at 77.20 against the dollar, after tumbling to its lowest since January 28 on Friday as investors ditched Russian assets.

The U.S. Federal Reserve will release its January meeting minutes on Wednesday, but analysts said central bank action was unlikely to return to the spotlight until the risk of an escalation over Ukraine recedes.

A rush into safe-haven assets has propped up the Japanese yen since Friday, while the Bank of Japan successfully defended its key bond yield target on Monday, holding the line on its ultra-loose monetary policy.

On technical fronts Dollar Index RSI stood at 37.11 and currently it is trading above all MA. So, BUY position can be taken with following target and stoploss:

TRADE SIGNAL – : Dollar Index – BUY: 96.24, TARGET: 96.59, STOP LOSS : 96.08

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