Fed’s George said that the central bank should weigh asset sales to curb inflation
The dollar keeps climbing north due to its safe-haven status, extending the ascent since last Friday when rising geopolitical tensions spooked investors, triggering risk aversion across the markets. Equity markets stay under pressure on Monday, with dollar demand persisting as Washington said that it was possible that the Russian invasion could take place in the coming days despite the Kremlin denying any intention to invade its neighbor.
As such, the USD index regained the 96.00 figure to notch early-February highs around 96.35 during the European hours. Last week, the index came under some selling pressure but managed to hold above the 95.00 level and regained the bullish bias eventually.
It looks like a risk-off tone will continue to drive the greenback higher in the coming days, especially amid the latest reports that Russia was ready to open fire on foreign ships that illegally enter its territorial waters. Following these remarks, the selling pressure in stock markets has intensified during the European trading hours.
Adding to a bullish tone surrounding the USD, Fed’s George said that the central bank should weigh asset sales to curb inflation. Late last week, Bullard said he now wanted a full percentage point of interest rate hikes by July 1.
As for EURUSD, the euro keeps bleeding amid a stronger dollar. The pair is now flirting with the 1.1300 figure, a break below which would pave the way towards the 1.1270 zone. At this point, the downside potential looks limited, but the technical picture has deteriorated further after the 20-DMA turned back into resistance earlier in the day. In a wider picture, the common currency is just marginally off mid-2020 lows seen around 1.1120 in January.