The dollar’s gains fade on the missile explosion in Poland

On Wednesday, the dollar hit just over multi-month lows against most major currencies, as flows supporting the safe-haven currency slowed after US President Joe Biden said a missile that caused an explosion in Poland may not have been launched from Russia.

NATO allies Poland and Ukraine said on Tuesday that the blast that killed two people on the Polish side of their border was likely caused by a Russian-made missile, raising fears of an escalation in the war.

It is likely that Russia did not launch the missile, Biden said, though investigations are ongoing.

Russia denies responsibility for the blast. NATO ambassadors will hold an emergency meeting on Wednesday, followed by a news conference at approximately 1130 GMT.

In the latest transactions, the euro rose 0.47 percent to $1.0399. It headed to regain the 4 1/2 month high of $1.0481 touched the day before after US producer price inflation came in below expectations, boosting bets that last week’s lower-than-expected consumer price inflation will repeat.

The single European currency had fallen from this level to 1.028 dollars after news of the explosion in Poland, which pushed traders towards the safe haven dollar, which also caused stocks to drop.

The dollar rose 0.2 percent against the Japanese yen, recording 139.63 yen, amid higher yields on long-term US Treasury bonds during trading in Tokyo.

The dollar fell 0.15% against the Swiss franc to 0.9418, close to its lowest level in seven months recorded on Tuesday.

The dollar index, which measures the greenback’s performance against six major currencies, fell 0.24 percent to 106.26.