News Tech: The ruble stabilized somewhat after falling to all-time lows on Tuesday. Safe-haven yen and Swiss franc held steady after their biggest gains in almost seven weeks, with traders paying close attention to the ongoing crisis in Ukraine.
Four days after Russia invaded its neighbor, currency markets calmed down a bit after Russian and Ukrainian officials negotiated the first round of ceasefire talks. The risk-sensitive Australian dollar recovered from losses of up to 1.2% in the previous session to trade near weekly highs.
The yen eased slightly to 115.07 per dollar after recording a 0.48% gain on Monday. Another haven currency, the Swiss franc, fell to 0.91775 per dollar after gaining 0.95% overnight. Currency volatility hit its highest level in 14 months on Monday, according to Deutsche Bank indices. “News from Ukraine remain bleak, with Russia-Ukraine talks yielding no resolution,” Rodrigo Catril, senior foreign-exchange strategist at National Australia Bank, wrote in a note. “Fighting rages on as the West looks to increase efforts to isolate Russia.”
The Reserve Bank of Australia is widely expected to make a monetary policy decision later Tuesday, keeping interest rates at record lows. Major cryptocurrency Bitcoin held near his near two-week high above $44,000 set late in the evening. The ruble plunged 30% to a record $120 to the dollar after Western countries and their allies accused Russia of new sanctions, including cutting some banks from the SWIFT financial network. The currency recovered somewhat after an emergency rate hike and other emergency measures by the Russian Central Bank, last trading at 102.
The instability will keep safe-haven currencies bid and euro under pressure, while the Aussie has so far held up due to higher commodity prices and Australia`s geographic distance from the conflict, Catril said. The dollar index, which measures the greenback against six major rivals, was stuck at around 96.75, after paring gains of as much as 0.89% on Monday to end the session 0.18% higher.