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Dollar falls, investors pending the Fed and the talks between Russia and Ukraine

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By Saqib Iqbal Ahmed

NEW YORK, March 14 (Reuters) – The dollar was lower on Monday against a basket of currencies, but found near the 21-month highs seen last week as investors eye peace talks between Russia and Ukraine, while the wait for the meetings of the main central banks this week limited the movements in the foreign exchange market.

* The dollar index, which measures the value of the greenback against six currencies, fell 0.056% to 98.96, not far from a nearly two-year high of 99.415 a week ago.

Dim hopes for progress in Ukraine-Russia peace talks sparked appetite for riskier currencies on Monday, but upcoming central bank meetings and another COVID lockdown in China curbed risk-taking .

* “We expect the US dollar to remain well supported when geopolitical risks are elevated and a hawkish Federal Reserve is present,” said Shaun Osborne, chief currency strategist at Scotia Bank.

* The US Federal Reserve is expected to raise interest rates at its meeting ending Wednesday, with a 99% chance of a 25 basis point hike.

* Fed Chairman Jerome Powell earlier this month hinted at multiple rate hikes this year as the central bank tries to rein in rising inflation.

* In the global session, the dollar hit a five-year high against the Japanese yen at 118.05 on bets that the Bank of Japan, which meets on Friday, will maintain its dovish stance despite rising inflationary pressures.

* The dollar rises to 0.65% against the yen, dose of situation in 118.04 yen.

* China’s lockdown measures to limit COVID-19 propaganda lift the dollar to 6.3961 against the yuan, a two-month low for the Chinese currency.

(Reporting by Saqib Iqbal Ahmed. Edited in Spanish by Javier Leira)

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