NEW YORK, March 1 – On Tuesday, the euro reached its lowest level against the US dollar since June 2020, and the Russian ruble depreciated in volatile trade as Russia’s invasion of Ukraine intensified and oil prices rose .
The US dollar index, which measures greenbacks against a basket of currencies, jumped and rose 0.6% as investors flocked to safe bets.
Investors were puzzled by recent events in Ukraine. Russia has warned Kyiv residents to leave their homes, and Russian commanders have changed tactics to step up bombing of Ukrainian cities. Read more
Brent oil futures closed at their highest since August 2014 amid fears of energy shortages. The global agreement on the release of crude reserves has failed to allay concerns about disruptions in supplies from the Russian invasion of Ukraine. Read more
“The likelihood of global oil shock in the 1970s is growing, and investors are moving to safe havens as quickly as possible,” said Carl Chamotte, chief market strategist at Cambridge Global Payments in Toronto. “The euro is at the forefront here, most exposed to energy shock, with the euro falling as oil and gas prices soar,” he said.
Russia’s invasion of Ukraine is the largest attack on a European country since World War II and has led to Western sanctions, including cutting off some Russian banks from the SWIFT financial network and limiting Moscow’s ability to deploy $ 630 billion in foreign reserves. .
The euro last fell 0.8% during the day to $ 1.1130 after falling to its lowest level since June 2020. The euro also fell 0.9% against the Japanese yen.
Morgan Stanley analysts said on Tuesday that they were closing trade recommendations for a long euro against the US dollar, yen, pound and Brazilian real and were “neutral on the euro as a whole”.
“Investors who have assets in Russia that will be increasingly difficult to sell due to growing capital controls and sanctions may consider hedging options. “Currencies that are highly correlated with the risk of rubles can be considered as such an option, such as the currencies in the CEE area and potentially the euro,” they wrote.
“We will potentially seek to re-enter these positions and reaffirm our thesis on the euro in the future if conditions justify it, but for now we believe it is best to limit risk and preserve capital when clearer ones emerge. topics.
The Russian ruble weakened by 1.34% against the greenback to 110.04 per dollar, according to Refinitiv.
The dollar fell 0.1% against the yen asylum.
Earlier, the Swiss franc reached its highest level since 2015 against the euro.
The demand deposits of the Swiss National Bank were slightly changed in February, suggesting that the central bank may have given up its attempts to slow the appreciation of the franc.
Bitcoin rose about 2.3%.
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Prices of currency offers at 16:00 (21:00 GMT)
Additional reports by Rodrigo Campos in New York and Elizabeth Hawcroft in London; Edited by Kirsten Donovan, Will Dunham, Gareth Jones and Jonathan Oatis
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