The price of the dollar jumped today to its highest level in twenty years; This was prompted by Russian President Vladimir Putin's announcement of military mobilization and readiness to expand the war on Ukraine, and this coincided with expectations of a sharp rise in interest rates from the US Central Bank.
Today, Wednesday, Putin ordered the first mobilization of the army in his country since World War II, and warned the West that if it continued what he described as nuclear blackmail, Moscow would respond with force to all its huge arsenal.
This news gave the dollar index a strong boost, which is the index that measures the performance of the US currency against a basket of major competing currencies, as it rose by more than 0.5%, to 110.87, the highest level since 2002.
The burden of selling due to the news fell on European currencies, as Putin's comments heightened concerns about the economic prospects for a region already suffering from the consequences of Russia's cuts in gas supplies.
The euro fell to a two-week low of $0.9885, close to a two-decade low reached earlier this month, and the euro was last down 0.6%, recording $0.9912.
And sterling fell 0.4%, hitting a new low, the lowest in 37 years, at $ 1.1304, even before Putin's comments.
The dollar index has risen 16% so far this year, and is on track to record the largest annual increase since 1981. Analysts say the growing geopolitical uncertainty is increasing the dollar's strength.
The Australian and New Zealand dollars also reached their lowest levels in years on Wednesday. The Australian dollar recorded $0.6655, its lowest level since June 2020, while the New Zealand dollar fell to $0.5877, its lowest level since April 2020.
