Dollar Rises as Russia Sends More Troops to Ukraine, Fed Meeting Looms

The US dollar climbed near a 20-year high in early European trading Wednesday, as President Vladimir Putin ordered Russia’s first mobilization since World War II and traders anticipated another big rate hike by the Federal Reserve.

The Dollar Index, which measures the value of the dollar in comparison to a group of six other currencies, was up 0.5% at 110.457 at 14:00 Thai time, drawing near to the 20-year high of 110.79 reached earlier this month.

Russian President Vladimir Putin ordered the country’s first mobilization since World War II on Wednesday, threatening that if the West persisted in its “nuclear blackmail,” Moscow would respond with the full force of Russia’s extensive military.

Without giving much details, Putin stated that “mobilization events” will begin on Wednesday, and that he had ordered more funds to be spent on increasing Russia’s weapons production.

According to Russia’s defense minister, 300,000 reservists will be called up, and those with previous military experience would be prioritized.

The dollar has also benefited from expectations that the Fed will raise interest rates by at least 75 basis points on Wednesday to tackle rising inflation.