USD Overview: The Focus is Back on FED

The US dollar rebounded today, Tuesday, to record a strong rise against other currencies, coinciding with several factors that affected its performance, on top of which are the current geopolitical tensions and the markets’ anticipation of critical economic data.

As Russia builds up its troops and soldiers at the Ukrainian border, Western countries led by the United States continue to warn of a possible invasion. These geopolitical tensions push the US dollar to be considered safe in such circumstances.

Concerns escalate over Ukrainian Tension

For its part, Russia has repeatedly denied its intention to launch any military operation against Ukraine, stressing that all reports that speak of this are false. The purpose of these allegations is to escalate tension in the region and inflame anti-Russian rhetoric in preparation for imposing new economic sanctions and as a justification for NATO’s expansion to the east. Which Moscow strongly opposes, saying that it threatens Russian national security.

High US bond yields stimulate the dollar

The US dollar rose clearly, also driven by the US government bond yield rise, as the US 10-year bond yield rose by 0.62% and scored about 1.785. The 5-year bond yield rose by a strong rate of about 1.16% to record 1.567, and the 2-year US bond yield also increased by 4.92% to record 1.023.

Fed

Markets are awaiting the US Federal Reserve’s decisions tomorrow, Wednesday, at 9:00 pm GMT, amid expectations that the Fed will keep the interest rate unchanged. Still, the focus will be on the statement. Expectations that a hint of a rate hike will be made soon, specifically in The next March meeting, coincides with the high inflation, which has become a huge burden on citizens. Therefore, the expected Fed decisions will have a powerful impact on the dollar and all currencies this week.