The U.S. dollar jumped to a new 20-year high on Wednesday after Russian President Vladimir Putin drafted 300,000 reservists to bolster his invasion of Ukraine and threatened to use nuclear weapons to protect his interests.
The US dollar hit a 20-year high.
The Dollar Index, which tracks the value of the U.S. dollar against other major currencies, jumped after the news on Wednesday.
The pound sterling fell as much as 0.7% against the dollar and is now at a 37 year low.
The euro fell below the dollar for the first time in two weeks.
The Japanese currency added to its value against the dollar and gold increased.
On Wednesday, the Federal Reserve is expected to raise interest rates in a bid to control inflation. It is also expected to announce further plans to hike the rate in coming months in line with central banks around the world that are also fighting rising inflation and a mounting cost of living crisis
After weeks of setbacks, Putin doubled down on the invasion in a televised address on Wednesday morning. It is Russia's first mobilization since World War 2 and a sign that the invasion is not going according to plan. Reports of heavy losses, stunning retreats, swathes of lost territory and serious supply chain issues as global sanctions bite down on the Russian economy have followed. The invasion was portrayed by Putin as a fight between Russia and the West. He acknowledged a series of upcoming referendums in occupied territories to join Russia as legitimate, contrary to the stance taken by the Western allies. Putin said that he was not bluffing and that Russia has a lot of weapons to respond to threats.
Putin hired 300,000 Reservists to fight in Ukranian as he supported referendums in Russian territories.
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