The dollar hit its highest level on Wednesday since the beginning of the pandemic and was on track to have its best month since 2015, boosted by the likelihood of US rate hikes and safe-haven flows fueled by the slowing economy in China and Europe.

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The US dollar index, which measures the greenback against a basket of six major currencies, remained at 102.37, its highest level since March 2020.

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Fears for energy security and Europe’s economy sent the euro down to $1.0635 in early trade, a five-year low after Russia’s Gazprom announced it will cut off gas supplies to Poland and Bulgaria later in the day.

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Commodity currencies have also been dumped in favour of the dollar, with the New Zealand dollar falling to $0.6562, its lowest level this year, and the Australian dollar falling to $0.7119, a two-month low. The Australian dollar was stable in early trade ahead of the release of inflation statistics due today.

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The Bank of Japan meets on Wednesday and Thursday, and markets expect projection revisions or perhaps policy tweaks to attempt to stem the yen’s recent slide.

On Tuesday, Japanese Prime Minister Fumio Kishida downplayed such a possibility.

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In offshore trade, the Chinese yuan was under pressure at 6.5902 per dollar, down more than 3.5% for the month. After North Korea committed to expanding its nuclear weapons, the South Korean won plummeted to a two-year low.

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Sterling reached a new 21-month low of $1.2560 on Wednesday, after falling more than 2% against the dollar this week as weak retail sales data triggered a rethink of Britain’s rate outlook.

Bitcoin fell to a six-week low of $38,228 as speculators unloaded riskier assets overnight.

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Brent crude futures increased $1.27 to $106.26 per barrel, up 1.2%. WTI crude futures in the United States climbed $1.11, or 1.1%, to $102.81 a barrel.