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The euro is struggling to recover after falling following the Russian invasion of Ukraine

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The euro is struggling to recover after falling following the Russian invasion of Ukraine

News Tech: The euro struggled to recover from a one-day plunge before early Asian trade on Friday, after Russia’s invasion of Ukraine affected the European single currency and sent investors Investors flocked to the safety of the dollar, yen and Swiss franc. The Russian ruble also fell overnight, to a record high of 89,986 against the dollar, before recovering slightly. The euro was last at $1.1196 after hitting a low of $1.1106 on Thursday, its lowest level since May 2020, down from $1.13045 where it ended on Wednesday.

Riad Chowdhury APAC, head of MarketAxess, a credit exchange, said: “The primary impact is obvious in Russia and Ukraine… but there is also impact in the Asia-Pacific bond and currency markets. Positive”. Chowdhury pointed to a “movement from flying type to quality in both global assets (for the dollar and yen) as well as emerging markets.” One dollar was worth 115.47 yen on Friday morning in Asia, after the greenback fell 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 risk-friendly British pound and Australian dollar also lost ground while the US dollar lost ground against the yen and Swiss franc, respectively. As a result, the dollar index hit 97.740, the highest level since June 2020. Last time at 96,990. On Thursday, Russia launched its biggest assault on a European country since World War Two, forcing tens of thousands of people from their homes as Ukrainian forces battled on multiple fronts. The United States responded with a wave of sanctions that hampered Russia’s ability to do business in major currencies, as well as sanctions on state-owned banks and companies.

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The pound was at $1.33840 and the Aussie at $0.7153 as both attempted to recover from Thursday’s punch. Besides the direct impact of the war in Ukraine, traders are trying to gauge the impact of the war on monetary policy around the world. Some European Central Bank (ECB) policymakers, even those sometimes seen as hawks, have said that the situation in Ukraine could slow the ECB’s exit from stimulus. Meanwhile, investors and some U.S. officials said the fight would likely slow down but not stop near a rate hike.