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The dollar opened with a gap higher against many major currencies today as traders sought safety, with the yen also boosted initially. Both have given up quite a bit of their early gains but are still sitting comfortably higher against the likes of the euro, aussie, kiwi and loonie.
The yen did lose more ground overall with USD/JPY having climbed from the opening gap lower of 114.98 to 115.50 currently.
Elsewhere, EUR/USD is still down 0.8% to around 1.1180 but that is well off the opening low of 1.1123:
It is a similar case for the aussie and kiwi with AUD/USD still down 0.4% to 0.7200 but above its opening low of 0.7155. Meanwhile, NZD/USD is down 0.3% to 0.6712 but off earlier lows of 0.6658 at the open.
Another reason for why the dollar is coveted today is in part to do with the sanctions on Russia. That is going to affect flows in the financial system as the Bank of Russia and some Russian banks are cut off. In turn, there will be impacts to liquidity and funding needs across many counterparties, and traders are going to need time to sort all of that out.
But as is the case with funding distress and wars, they all fade eventually (in one way or another) and that sets out a good opportunity to capitalise on a rebound in sentiment once the fog clears.