FOREX-Dollar flat as Biden carries new sanctions plans in Europe

Band Julien Ponthus

LONDON, March 23 (Reuters)The dollar was steady against its major peers on Wednesday as the boost from the US Federal Reserve’s aggressive stance earlier in the week faded and investors waited for President Joe Biden to unveil new sanctions against Russia during his trip to Europe.

Biden, who will travel to Brussels on Wednesday for talks with NATO and European leaders, will push Europe to reduce its dependence on Russian oil and gas and could announce new sanctions against members of the Russian parliament following the invasion of Ukraine by Moscow.

Oil prices fell on Tuesday as the European Union appeared unlikely to agree to a ban on Russian oil, which would also weigh on the euro.

“A Russian oil embargo would increase the likelihood of Russia in turn turning off the gas tap to Europe,” wrote Ulrich Leuchtmann, head of foreign exchange research at Commerzbank, saying such a scenario could plunge Europe in recession.

Leuchtmann said the euro, with the European Central Bank lagging its peers in the global monetary cycle, had to suffer as “the Fed is likely to be much more aggressive in dealing with inflationary consequences than the ECB.”

At 08:42 GMT, the dollar index = USDwhich measures the greenback against six major peers, remained unchanged at 98.540.

The yield of US 10-year benchmark yields US10YT=RR fell to 2.37% in European morning trade after jumping on Monday when US Federal Reserve Chairman Jerome Powell opened the door to an interest rate hike of more than 25 basis points in the next few months. political meetings in order to fight against inflation.

The euro fell 0.09% to $1.1022 EUR=EBSwhile the pound sterling GBP=D3 fell 0.25% to $1.3230 after hitting its highest level against the dollar in nearly three weeks.

Britain’s inflation rose faster than expected last month to a new 30-year high, adding to historic pressure on household finances that Finance Minister Rishi Sunak is under pressure to ease in a more recent budget update. late Wednesday. *

Britain has the second highest annual inflation rate among the Group of Seven countries, behind only the United States, as global commodity and energy prices soar, exacerbated by the invasion of Ukraine by Russia.

High commodity prices have clearly hurt the yen as Japan imports most of its energy, widening the country’s trade deficit.

The yen JPY=EBS slid to a new six-year low of 121.415 to the dollar overnight, but then limited losses to 0.14% at 120.985 to the dollar.

Against the Japanese currency, the Australian dollar reached its highest level since December 2015.

The Swedish krona appreciated against the dollar and the euro as Sweden’s central bank deputy governor Anna Breman said plans to raise the benchmark rate and shrink its balance sheet may have to be advanced to control inflation.[nS3N2TT007)[nS3N2TT007)[nS3N2TT007)[nS3N2TT007)

In the cryptocurrency markets, bitcoin BTC=BTSP and ether ETH=BTSP were slightly lower at $42,300 and $2,950 respectively.

World exchange rates

(Reporting by Alun John and Julien Ponthus; Editing by Edwina Gibbs and Edmund Blair)

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