By Gina Lee

Investing.com – The dollar was up on Thursday morning in Asia, nearing heights not seen in two decades. A brewing energy crisis in Europe slammed the euro, and investors also digested the Bank of Japan’s latest policy decision.

By 11:48 ET (03:48 GMT), the index that measures the greenback’s performance against other currencies increased 0.42%, to 103.395 (3:48 GMT). It reached a 5-year peak of 103.28, and would reach levels never seen since 2002.

The price of the pair rose by 0.94%, to 129.63. It also increased 0.3% month on month and increased 0.9% annually in March 2022.

This pair declined 0.38%, to 0.7099. Australia released figures earlier in today. They fell 0.65% to 0.6503.

While the pair was up by 0.39% at 6.58588, it was down 0.27 percent to 0.2515.

Following a low of $1.0515 five years ago, the euro was fixed at $1.0553. After falling 4.6% over April, the euro is now at $1.0553. This follows a five-year low of $1.0515 on Wednesday. The single currency is now dangerously close to huge chart support levels stretching from $1.0500 down to 2017’s low of $1.0344. Unexpectedly, a break can lead to new lows than 2002. This could result in an irreversible decline below parity.

This added to Europe’s economic problems by raising the energy price in dollars. Russia was also cutting off supplies to Poland, Bulgaria and other countries, sending those prices skyrocketing.

Helimacroft, RBC Capital Markets global commodity research head Helima Croft said to Reuters that “this appears to have been the first overt act energy war.”

It is unclear if the Ukraine cut-off will apply to importers of other important commodities. This could be a test of European determination to help Ukraine in these difficult times of rising oil prices and growing recession risks.

This could make it less likely for the European Central Bank (ECB), to tighten as aggressively. It could be unable to keep up with the U.S. Federal Reserve. Later in the day, the ECB will issue its economic bulletin.

Following its earlier policy announcement, the central bank held its interest rate stable at -0.10%. As long as yields remain near zero, the central bank has not moved closer to tightening monetary policy.

A potential problem for the U.S. currencies is U.S. data that will be available later in the morning. Market forecasts an increase of 1.1%. However, there are risks to consider after the record-breaking U.S. trade deficit which imply a significant drag on net exports. The GDP could actually have contracted by an annualized 1.3% in the first quarter, and any negative reading could temper the dollar’s ascent if only temporarily, Natwest Markets analysts told Reuters.