The lowest since early February, the dollar glid to 114.845 yen in afternoon trading. It was last under 0.4% at 114.93 yen.
Against the Swiss currency, the dollar dropped to 0.9189 francs, the weakest since Feb. 3. The dollar last changed hands at 0.9202 francs, down 0.2%.
On Thursday, U.S. President Joe Biden stated there was now every indication Russia was preparing to invade Ukraine in the next few days and preparing a pretext to justify it behind Ukrainian forces. Pro-Moscow rebels traded fire in eastern Ukraine.
Russia also accused Biden of fueling tension and released a forcefully worded letter that noted Washington missed its security demands and threatened unspecified “military-technical measures.”
Suspicions of a Russian invasion pushed U.S. stocks sharply lower and produced bids for safe-haven Treasuries.
For now, the Russia-Ukraine conflict has superseded worries about the Federal Reserve’s plans to draw monetary policy, starting at the March meeting of the Federal Open Market Committee. But the market has been separated over the expected interest rate increase size.
Last week, with the most delinquent U.S. consumer prices data demonstrating the most significant yearly gain in 40 years, the rate futures market had priced in an approximately 70% chance of a half-percentage rate rise in March. That has reached down to 37% on Thursday,
Analysts said the more likely scenario is for the Fed’s quarter-point tightening.
But even with the Fed’s hawkish shift, the dollar has remained essentially unchanged.
Dollar/Yen soaking
The dollar index, a measure of its value versus six major currencies, has earned just 0.2% this year. Against the yen, however, the dollar has been down 0.2% so far in 2022.
U.S. Treasury 2-year yields, which recollect rate expectations and correlate with dollar/yen, have soaked approximately 74 basis points.
In afternoon trading, the dollar index was facedown at 95.827.
Some commodity currencies, which are sensitive to risk sentiment, declined, with the Australian dollar falling 0.1% to US$0.7188. The Norwegian crown fell against the dollar, which rose 0.5% to 8.917.
In cryptocurrencies, bitcoin, which drives in tandem with other risk assets, was last down 7.8% at $40,590.
