Dollar gains fade on escalation of Russia/Ukraine tensions

New York (Apr 24)  The U.S. dollar gave up its gains on the euro and yen on Thursday as risk aversion due to rising tensions along the Russia/Ukraine border took precedence.

Russia started military drills near its border with Ukraine on Thursday in response to operations by Ukrainian forces against pro-Russian separatists and NATO exercises in eastern Europe, the Interfax news agency reported, citing Russian defense minister Sergei Shoigu.

After upbeat U.S. durable goods data for March came in above expectations the dollar rose versus the euro and yen, only to see those advances retreat on the headlines from Russia.

"Geopolitical risks are taking precedence. The move down in the dollar/yen in such a short period of time is pretty significant. This is all really risk aversion," said Camilla Sutton, Camilla Sutton, chief currency strategist at Scotiabank in Toronto.

The dollar fell 0.37 percent to 102.12 yen, after having been as high as 102.64 yen in earlier trade.

The euro bounced off its session low $1.3790 to recoup much of the lost ground to trade up 0.02 percent at $1.3815.