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Greenback Gets Boost from Ukraine Crisis

March 3, 2014 at 14:34 by Miranda Marquit

Mix of US dollar billsRisk aversion is running high right now, thanks in large part to concerns about what’s happening in Ukraine. Protests in Ukraine have led to the ouster of its president, and now Russian troops are moving in for “war games.” With concern that the region could explode, some Forex traders and investors are playing it safe.

US dollar is gaining against its high beta counterparts right now, thanks in large part to concerns that the situation in Ukraine could become explosive. Already, protests in the area have resulted in the ouster of the pro-Russian president, and now Russia appears to be moving in — at least in some areas that are heavily pro-Russia. It’s setting up to become Russia against the West, and concerns that the region could be destabilized are contributing to risk aversion.

So far, the greenback isn’t making huge gains, and it has slipped a bit against the euro, but it is finding support. Additionally, with safe haven demand growing, there is speculation that gold and the greenback might move in tandem, rather than inversely to each other.

At 14:29 GMT the US dollar index is at 79.8580 from the previous close at 79.6910. EUR/USD is a little higher at 1.3771 from the open at 1.3760. GBP/USD is down to 1.6740 from the open at 1.6742.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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