2014.04.1603:28:25UTC+00Dollar Surges as Ukraine Tension Mounts; Aussie Holds Pullback

The dollar advance versus most of its 16 major peers as investors are looking for haven assets in the middle of dispute in Ukraine and before Federal Reserve Chair Janet Yellen speaks today.

The greenback’s appeal as the world’s reserve currency was developed as deadly clashes in Ukraine triggered the U.S. and European Union to acknowledge providing extra penalties versus Russia. Australia’s dollar held an earlier decline after a report revealed that development was more stable than projected in China, the South Pacific nation’s largest trading partner. New Zealand’s kiwi downgraded a second day after inflation slowed and dairy prices sagged down.

“Ukraine is bubbling under, and it has huge potential to be mismanaged by Europe and the U.S.,” said Derek Mumford, director at Rochford Capital, a currency risk-management company in Sydney. Russian President Vladimir Putin may be “pushed into a corner and will have to invade, which won’t be good for Europe, but is potentially good for the U.S. dollar.”

The U.S. currency inched up 0.2 percent to 102.15 yen as of 11:17 a.m. in Tokyo after soaring 0.4 percent over three days to 101.92 yesterday. It was slightly altered at $1.3813 per euro and jump 0.5 percent this week. Japan’s currency fetched 141.10 per euro from 140.79.

Aussie Bounces Back

The Aussie exchanged 0.2 percent down at 93.48 U.S. cents after earlier pulling lower as much as 0.3 percent. It plunged 0.7 percent yesterday, the most since March 19. New Zealand’s kiwi dollar dive 0.7 percent down to 85.81 U.S. cents.

The Bloomberg Dollar Spot Index, which records the U.S. currency versus 10 major counterparts, was at 1,010.48, set for the topmost close since April 7.

Yellen is scheduled to address the Economic Club of New York today.

Ukraine unleashed an offensive to dislodge militants from cities in the eastern Donetsk region as authorities in the capital Kiev said Russian special forces were identified among the anti-government groups.

The U.S. and Russia plan to proceed with four-party discussions in Geneva with EU and Ukrainian officials this week, even as the EU and the U.S. are acknowledging widening penalties versus Russian individuals and probably firms.

The Aussie recovered after the National Bureau of Statistics said today in Beijing that China’s economy progressed 7.4 percent in the January to March quarter from a year earlier. That compares with economist projections for a 7.3 percent development, and 7.7 percent progress previously reported for the quarter before.