Dollar Takes A Hit Amid Peace Talks Progress

The dollar tumbled against a basket of peer currencies on Wednesday morning following a breakthrough in peace talks between Russia and Ukraine, keeping the Euro afloat while decreasing the safe-haven appeal of the greenback. 

The US Dollar Index, which measures the value of the dollar against a bunch of other currencies, declined 0.32% to 98.125. 

The USD/JPY pair plunged 1.09% to 121.50. The Chinese yuan slid 0.06% against the greenback amid the new pandemic restrictions in Shanghai. 

Traders seem to turn to currencies deemed riskier. The euro hit a two-week high of $1.1134 and a three-month high of 84.82 pence against the pound. Hopes of a ceasefire after Russia pledged to drastically reduce military activity is most beneficial to the Euro from a geopolitical standpoint. The progress also saw the Rouble spike to a one-month high of 83.50 to the dollar.  

The Antipodean currencies Australian and New Zealand dollars gained ground with the boost driven by risk appetite. The AUD/USD pair was up 0.13% while NZD/USD climbed 0.45%.

Meanwhile the Japanese currency is clinging around 123 against the dollar and is on track through its worst month since November 2016. The yen has lost about 7% against the greenback as the Bank of Japan keeps its hawkishness at bay. It’s also sticking to its four-day pledge of limitless bond purchases to keep 10-year rates below the 0.25 percent cap, which resulted in a 0.225% drop in government bonds.