Investors sought safety in US assets as stocks fell throughout the world due to the growing prospect of a recession on Wednesday, holding the dollar's index against key rivals just below a two-decade peak hit two weeks ago.

The dollar index, which compares the value of the dollar to six other currencies, increased by 0.067 percent to 104.54 primarily due to overnight losses in the euro. On June 15, a two-decade high of 105.79 was reached. Despite U.S. 10-year Treasury yields falling by about one percentage point in Tokyo trading, the dollar held steady because investors continued to favour Treasuries due to the deteriorating risk sentiment.

Following overnight losses on Wall Street, Asian stocks fell as concerns about an economic slowdown were fueled by a sharp decline in consumer confidence in the United States at a time when the U.S. Federal Reserve is hurriedly raising interest rates to combat inflation. The European Central Bank (ECB) president Christine Lagarde provided no new information regarding the direction of European interest rates at the ECB's annual symposium on Tuesday, and the euro fell 0.14 percent to USD1.0506 after falling as low as USD 1.5025.

Although economists are split on the size of any increase, it is largely anticipated that the ECB will follow its global peers and raise interest rates in July for the first time in a decade in an effort to slow down the rate of inflation that is increasing. Later on Wednesday, Lagarde and Fed Chair Jerome Powell will participate in a panel discussion at the forum.

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