The situation in Ukraine is incredibly fragile. Therefore, economists at ING believe that European currencies should continue to underperform, allowing the US Dollar Index (DXY) to move back above the 97.00 level over coming days.

Favour the dollar for liquidity and energy independence

“Given the very uncertain picture in Ukraine, we suspect that investors will still prefer the liquidity and energy independence of the dollar – at least against the European currencies.”

“With the DXY heavily weighted towards European FX, we would certainly back the dollar right now and would favour DXY returning to the 97.00 area over coming days.”