Euro slips to month-low as West prepares new Russia sanctions
By Joice Alves
LONDON (Reuters) – The euro fell on Wednesday to its lowest stage in a single month towards a strengthening greenback because the prospect of recent Western sanctions on Russia added stress to the European forex.
The euro was 0.15% decrease versus the greenback at $1.08900 at 0800 GMT, after briefly touching an almost one-month low of $1.08735.
The US and its allies ready new sanctions on Moscow over civilian killings which President Volodymyr Zelenskiy described as “battle crimes”, as heavy preventing and Russian airstrikes pounded the besieged port of Mariupol.
“A brand new spherical of sanctions towards Russia are anticipated to be introduced in the present day by the U.S. and the EU, with any implications for vitality exports more likely to maintain the euro underneath stress,” ING FX strategists Francesco Pesole and Chris Turner informed purchasers.
French eurosceptic, far-right candidate Marine Le Pen closing in on President Macron within the polls forward of this month’s presidential elections “provides one other menace to the euro”, the ING strategists added.
The greenback index, which measures the dollar towards six friends, rose 0.12% to 99.600, after touching its highest since Might 2020 of 99.759.
The index had gained 0.5% on Tuesday after Fed Governor Lael Brainard, usually seen as a extra dovish policymaker, mentioned she anticipated a mixture of rate of interest will increase and a fast stability sheet runoff to convey U.S. financial coverage to a “extra impartial place” later this 12 months, with additional tightening to observe as wanted.
The U.S. 2-year yield was at its highest stage since January 2019, the 5-year yield at its highest since December 2018, and the benchmark 10-year yield rose to its highest since March 2019. [US/]
The Fed will launch later within the day minutes of its March assembly which might be anticipated to supply contemporary particulars on its plans to cut back its bond holdings.
“What now issues is what the Fed does in Might… and what alerts it sends out relating to rates of interest this 12 months – a number of hikes of greater than 25bp (foundation factors)?” mentioned Antje Praefcke, FX Analyst at Commerzbank.
She added that as market have already priced in rate of interest hikes, a affirmation of those expectations will probably have solely a “marginally constructive impact on the greenback”.
Sterling was flat versus the greenback at $1.30690, after touching a three-week low towards the dollar. [GBP/]
Bitcoin was 0.4% softer at $45,305.
(Reporting by Joice Alves, extra reporting by Alun John; Modifying by Kim Coghill)
