The Dollar Rose as High as 102.78 Hitting 2-Year High
On Wednesday, in the early European trading session at 9:00 AM GMT, the dollar index which tracks the greenback against six other major currencies, skyrocketed to 102.78, its strongest since March 2020. The surge was due to China’s strict lockdowns, and the rising Ukraine-Russia geopolitical tensions alongside prospects for more tightening from Federal Reserve.
Russia announced that it will be withholding gas from Poland and Bulgaria starting Wednesday, which is good news for the U.S dollar because Russia mainly sells their oil in dollars instead of TL or PLN as well as other currencies like roubles.
With the Federal Reserve hikes interest rates, it will likely cause inflation to rise at a four-decade high. This could be bad news for countries like China that are currently experiencing economic problems because of strict COVID -19 lockdown in their country along with other factors such as weaker global demand.