Dollar hits 20-year high after Putin calls up more troops

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The dollar hit a new 20-year high and global shares came under pressure on Wednesday after Vladimir Putin said Russia’s armed forces would call up reserve troops in a move that is expected to prolong the war in Ukraine.

An index measuring the greenback against six peers added as much as 0.6 percent in early London dealings to reach the highest level since 2002. The pound dropped 0.3 percent to $1.134 and the euro lost 0.7 percent to consolidate below parity at $0.99. The dollar is widely perceived as a haven currency during times of geopolitical tension and economic stress.

Japan’s yen, which often advances as domestic investors bring funds home during periods of market tumult, added as much as 0.3 percent on Wednesday to ¥143.33 against the dollar.

Traders across stock markets in Europe braced for a bumpy session after losses in the US on Tuesday that was followed by a broad retreat across Asian equities.

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Europe’s regional Stoxx 600 gauge lost 0.1 percent in early dealings on Wednesday. Germany’s Dax and the French CAC 40 both fell about 0.7 percent.

In Hong Kong, the Hang Seng index dropped 1.6 percent while Japan’s Topix lost 1.4 percent, China’s CSI 300 fell 0.7 percent and South Korea’s Kospi shed 0.9 percent.

On Wall Street on Tuesday, the S&P 500 had closed 1.1 percent lower in a broad decline that saw all of the stock market’s main sectors fall back during the day.

Big moves in US government bond yields had weighed on equities ahead of the conclusion of the latest meeting of the Federal Reserve on Wednesday, which is expected to deliver a third consecutive increase of 0.75 percentage points.

The yield on the 10-year US Treasury note reached an 11-year high of 3.6 percent on Tuesday, while the yield on the policy-sensitive two-year note hit a 15-year high of 3.99 percent. Both yields slipped lower on Wednesday, with the 10-year losing 0.04 percentage points to 3.53 percent. Bond yields rise as their prices fall.

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