Dollar Hits 20-Year High After Russia Mobilizes More Troops

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The U.S. dollar rose to 20-year highs early Wednesday after Russian President Vladimir Putin announced a partial mobilization of the country’s military and issued a nuclear threat.

In a national address Putin ordered Russia’s reservists to mobilize to help with the war effort in Ukraine and said “those who are trying to blackmail us with nuclear weapons should know that the wind can change in their direction,” according to multiple reports.

The U.S. dollar index, which tracks the dollar against six major global currencies, rose 0.5% to its highest level since June 2002. The Japanese yen, seen as a safe haven, was the only currency up on the dollar early in the day.

Other safe haven assets, such as gold and bonds moved higher following Putin’s comments. Oil prices jumped sharply as Putin’s comments renewed supply concerns. Brent crude – the international benchmark – rising more than 2.5% to above $93 a barrel and West Texas Intermediate (WTI) futures close to 3% up at $86.29.

Gold futures climbed 0.6% to $1,681 an ounce, while silver rose 1.4% to $19,445 an ounce. 

Treasuries were boosted, pushing yields lower, with the 2-year German bund slipping 8 basis points to 1.631%. Yields on the U.S. 2-year and 10-year notes all fell around 3 basis points.

Write to Callum Keown at [email protected]