FOREX-Dollar flat in choppy trade with focus on Ukraine; Kiwi Climbs on Central Bank Rise

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Band Chuck Mikolajczak

NEW YORK, February 23 (Reuters)The U.S. dollar was little changed in choppy trading on Wednesday as investors digested the latest developments in the Ukraine crisis after a host of countries announced sanctions against Russia for sending troops into its neighbor’s breakaway regions. .

The United States and its allies unveiled new sanctions against Russia, with the European Union’s measures due to come into force on Wednesday, while Russian news agency TASS reported that Moscow had begun evacuating diplomatic personnel from all its missions in Ukraine.

The greenback has been subdued recently as tensions in Ukraine have risen, fueling speculation that the US Federal Reserve may be less aggressive in tightening policy at its March meeting. Expectations of at least an interest rate hike of at least 50 basis points fell to around 37% from around 45% a week ago, according to CME. FedWatch Tool.

“Today it’s just a little quiet in the forex market where you just see more wait-and-see investors,” said Edward Moya, senior market analyst at Oanda in New York.

“It just seemed like this market had gone too far in price during aggressive Fed tightening that now it looks like you’re seeing a bit more of a pullback from those expectations.”

The dollar index =USD increased by 0.007%, the euro USD= down 0.03% at $1.1322.

The Russian Ruble RUB= weakened 2.09% against the greenback to 80.69 to the dollar, returning gains made on Tuesday.

The New Zealand dollar NZD= jumped after the Reserve Bank of New Zealand raised interest rates and said further tightening may be needed. The kiwi lately rose 0.71% against the greenback at $0.678.

The rise in the New Zealand dollar, along with rising crude prices, also helped other commodity currencies such as the Canadian dollar and Australian dollar. The two Brents LCOc1 and West Texas Intermediate CLc1 were up more than 1% on the day.

The Canadian dollar CAD= rose 0.42% against the greenback at 1.27 to the dollar while the Australian dollar USD= was up 0.42% against the greenback at $0.725.

The Japanese yen strengthened 0.01% against the greenback to 115.05 to the dollar, while the British pound GBP= last traded at $1.3559, down 0.17% on the day.

The Chinese Yuan CNH=-D3 hit a new four-year high against the dollar amid signs that the escalating Russia-Ukraine crisis is boosting foreign demand for Chinese assets, and last strengthened by 0.1 % against the greenback at 6.3131 to the dollar.

The greenback rose 0.26% against the Swedish krona SEK= to 9.35 to the dollar after Riksbank Deputy Governor Martin Floden said on Monday that the central bank was unlikely to raise rates in the coming year.

(Reporting by Chuck Mikolajczak; Editing by Jonathan Oatis)

((charles.mikolajczak@tr.com; @ChuckMik;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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