Graphic Rewind: USD Reaches 3-Day High Despite Ukraine Losses

Talking Points:

• US Dollar Index sets a 3-day high on RBA caution over Aussie
• Greenback losses to Euro, Pound unwound despite a more peaceful Putin

A look back at the past 24 hours of Forex trading using movements in the US Dollar Index:

US Dollar 15-Minute 12:00 03/03 to 12:00 03/04 EST

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The Dow Jones FXCM US Dollar Index has risen to a 2-day high in Tuesday’s trading despite some initial losses to the Euro and Pound on a less aggressive signal from Russia.

In the second half of NY trading on Monday, the US Dollar gained about 25 pips against the Euro and Pound, possibly signaling a worse sentiment regarding the tensions in Ukraine. Slightly before the greenback gains, Russian President Putin had denied that he set an ultimatum for Ukrainian soldiers to surrender in Crimea, but that news should have been slightly positive for European currencies.

The US Dollar then rose higher in the Tokyo session, as the RBA reported no change in monetary policy but commented that the Australian Dollar is higher by historical standards. The Australian Dollar initially rose 25 pips on the news of the unchanged policy, but AUD/USD was quickly slammed 30 pips lower on the currency comment.

Finally, the US Dollar Index fell below the Tuesday open, as Putin denied sending troops into Crimea. The less-aggressive tone from Putin seemed to quell market fears, and the Euro and Pound each rose higher. Those gains were furthered as European equities opened significantly higher following the most recent Ukraine related headlines.

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Charts created by Benjamin Spier using Marketscope 2.0

-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to [email protected] .