The dollar stood strong over weak stock markets on Tuesday, with investors concerned about increasing interest rates, global growth, and geopolitical concerns, while the yen tested levels that have sparked government intervention.

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The yen fell to 145.80 per dollar yesterday, just 10 points short of the 24-year low seen when the Japanese government intervened three weeks ago. On Tuesday, Japan returned after a holiday, and the yen was trading at 145.65.

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Strong US labour statistics and the expectation that inflation readings due on Thursday will remain persistently high have all but crushed bets on anything other than high-interest rates until 2023, propelling the dollar back to multi-decade highs.

Russia launched missiles at Ukrainian cities on Monday in response to a bombing that destroyed the sole bridge connecting Russia to the occupied Crimean peninsula, pushing markets into a panic mood.

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The Australian dollar fell to a two-and-a-half-year low of $0.6275 on Monday and was hovering at $0.6296 early Tuesday. According to National Australia Bank analysts, the Australian dollar was the market’s “whipping boy” during the sell-off, and additional lows were probable in the near term since sentiment is weak.

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The New Zealand dollar also hit a two-and-a-half-year low on Monday, at $0.5545, and is on the verge of breaching its pandemic low, with weak data from China further dampening sentiment.

The US dollar index was up 0.053% at 113.12, not far from its 20-year high of 114.78 it reached late last month.

Britain’s markets remain tense, despite the Bank of England increasing bond purchases and finance minister Kwasi Kwarteng vowing to push forward certain budget announcements.

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Gilts fell dramatically overnight, as sterling fell to a 10-day low of $1.1027 on Monday. On Tuesday, the pound was up 0.28% at $1.1090.