FOREX-Euro tries to recover after falling during the Russian invasion of Ukraine


The euro was struggling to recover from its plunge the day before in early trading in Asia on Friday, after Russia’s invasion of Ukraine hit Europe’s common currency and sent investors rushing to safety dollar, yen and Swiss franc.

The Russian ruble also fell overnight, falling to a record high of 89.986 to the dollar, before recovering a bit. The euro was last at $1.1196 after hitting lows of $1.1106 on Thursday, its lowest since May 2020, plunging from the $1.13045 it ended on Wednesday.

The risk-friendly British pound and Australian dollar also suffered while the US dollar in turn lost ground against the yen and the Swiss franc. As a result, the dollar index hit 97.740, its highest since June 2020. It was last at 96.990.

On Thursday, Russia unleashed the biggest attack on a European state since World War II, prompting tens of thousands to flee their homes, as Ukrainian forces fought on multiple fronts. The United States responded with a wave of sanctions hampering Russia’s ability to do business in major currencies, as well as sanctions against banks and state-owned companies. “The first-order impact is naturally in Russia and Ukraine … but there is also an impact in Asia-Pacific bond and currency markets,” said Riad Chowdhury APAC, head of MarketAxess, a trading platform credit.

Chowdhury pointed to a “flight-to-quality type movement in both global assets (toward the dollar and yen) as well as emerging markets.” One dollar was worth 115.47 yen on Friday morning in Asia, after the greenback tumbled 0.48% against the Japanese currency on Thursday. The dollar was at 0.9241 against the Swiss franc after losing 0.85% the previous day.

The pound was at $1.33840 and the Australian dollar at $0.7153 as the two tried to recover from their Thursday punch. Besides the direct impact of the war in Ukraine, traders were trying to gauge the impact of the war on monetary policy around the world.

Several European Central Bank (ECB) policymakers, even those sometimes seen as hawkish, have said the situation in Ukraine could cause the ECB to slow its exit from stimulus. Meanwhile, investors and some U.S. officials said the war would likely slow but not stop nearing interest rate hikes.

(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)


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