By Gina Lee

Investing.com – The dollar was up on Wednesday morning in Asia, slowly heading towards its highest level in nearly two years. The U.S currency jumped overnight over hawkish comments from U.S. Federal Reserve policymakers, while the euro was down as the West mulls .

The that tracks the greenback against a basket of other currencies edged up 0.15% to 99.580 by1:22 AM ET (5:22 AM GMT).

The pair was up 0.24% to 123.9.

The pair inched up 0.04% to 0.7582 while the pair inched down 0.04% to 0.6944.

The pair inched up 0.04% to 6.3665 and the pair inched up 0.05% to 1.3075.

The dollar index hit its highest level since May 2020, gaining 0.5% on Tuesday over comments from Fed Governor Lael Brainard. Normally viewed as a more dovish policymaker, Brainard said she expects a combination of interest rate hikes and a rapid balance sheet runoff to bring U.S. monetary policy to a “more neutral position” later in 2022, with further tightening to follow as needed.

“Brainard’s comments are the proximate cause of the back up in yields and the firmer dollar that we’ve got,” National Australia Bank Ltd. global head of FX strategy Ray Attrill told Reuters.

The U.S. 2-year yield is at its highest level since January 2019. The 5-year yield is at its highest since December 2018 and the benchmark 10-year yield rose to 2.6120%, its highest since April 2019.

“But when we talk about the dollar, it’s difficult to divorce it from the euro-dollar exchange rate, given its weight in the index, and the euro has been done no favors by the latest talk about broadening sanctions, which is opening up bad news for the eurozone economy,” Attrill added.

The European Union (EU), alongside the U.S. and the Group of Seven, is coordinating a fresh round of sanctions on Russia over its invasion of Ukraine. The sanctions could involve banning the purchase of Russian coal and preventing Russian ships from entering EU ports.

The sanctions are the latest since the Russian invasion on Feb. 24 and are in response to the discovery of dead civilians in the Ukrainian town of Bucha.

The dollar also gained against the Japanese yen, climbing 0.27% against the Japanese currency for its highest gains in a week and heading back towards the seven-year peak of 125.1 hit in March 2022. The Bank of Japan’s dovish stance is pinning Japanese yields down, and the widening gap between U.S. and Japanese yields is weighing on the yen.

The Australian dollar held firm near Tuesday’s nine-month peak after the Reserve Bank of Australia signaled higher interest rates were approaching. The kept its interest rate steady at 0.1% when it handed down its policy decision on Tuesday.

The will also hand down its policy decision on Friday.