Tom Westbrook

SINGAPORE (Reuters – Euro was pinned at 21 months low by fears of Russia’s invasion Ukraine. Commodity currencies hit multiple-week highs due to rising export prices.

From an overnight peak of $1.1058, it recovered to $1.1111 during the Asia session. It was at its lowest level since May 2020. It is still down 1.4% so far this week and heading towards a fourth weekly loss to the U.S. Dollar.

As Australian exports, such as coal and gas, rise, the Australian dollar soared to $0.7306, a new seven-week high, and then hovered at $0.7295 Thursday.

Today’s euro session is down 9 sessions to A$1.5218, a 4-year low against the Australian dollars.

Jane Foley (Rabobank senior FX strategist) said that “in the current crisis we regard the euro’s status as vulnerable.” She also stated that Rabobank is reviewing its $1.11 upside target.

Foley stated that there was a web of complicated relationships at the corporate level between Russian and EU firms, especially in the energy sector.

“Energy and agricultural prices have increased as well. This war in Ukraine implies higher inflation for a longer time and slower growth.

The Euro zone’s inflation was at an all-time high of 5.8%, according to overnight data. It surpassed expectations, prompting policymakers to warn about stagflation.

The sterling has been pulled lower by the euro after Russia’s invasion. But, it still managed to rebound from Wednesday’s lows of $1.3275 and trade at $1.3387 (Asia)

Even though the support for Havens like the yen or Swiss franc has been good, they fell overnight due to the strength of the dollar and other risky currencies. Last traded at 115.54 dollars. At 97.479.

Jerome Powell (Federal Reserve Chair) stated that while the central bank is expected to begin gradually raising its interest rates, it would also be ready to take more drastic measures if required – more so than what scenario traders had priced in.

BOMBARDMENT

Kharkiv (the second largest Ukrainian city), was heavily bombarded on Wednesday. Its centre became a decrepit place with many ruined buildings. Russia claimed that its forces had captured Kherson, a Black Sea port.

Futures rose to $115.11 per barrel, a 7-year record. The Bank of Canada raised its interest rates for the first time since 2018. This prompted a surge in oil prices and a C$1.2628/dollar increase over the previous five weeks.

A U.N. Resolution reprimanding Moscow received support from 141 members of the assembly. Heavy sanctions have hit Russian assets, and the ruble has fallen to a new low of 100 dollars in Moscow on Wednesday.

In interbank foreign trade, the ruble was somewhat firmer at USD 97.999.

The Eastern European currencies have suffered, however, as the Hungarian Forint hit record lows against the dollar and euro overnight, while the Polish Zloty fell to a two decade-high. [EMRG/FRX]

New Zealand dollars held steady at $0.6779, close to Wednesday’s 1-week high. The bounce of the early-week market dropped off and $44,000 was bought.

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Prices for currency bids at 0059 GMT

Description U.S. Close RIC Pct Change Pct High Low Bid

Last Change

Session

Euro/Dollar

$1.1103 $1.1119 -0.15% -2.34% +1.1121 +1.1102

Dollar/Yen

115.5950 115.5300 +0.07% +0.51% +115.6050 +115.5000

Euro/Yen

128.33 128.43 -0.08% -1.53% +128.4700 +128.2500

Dollar/Swiss

0.9211 0.9205 +0.07% +0.98% +0.9211 +0.9203

Sterling/Dollar

1.3383 1.3405 -0.16% -1.04% +1.3404 +1.3384

Dollar/Canadian

1.2644 1.2631 +0.11% +0.01% +1.2646 +1.2630

Aussie/Dollar

0.7287 0.7298 -0.14% +0.25% +0.7297 +0.7287

NZ

Dollar/Dollar 0.6776 0.6787 -0.14% -0.99% +0.6786 +0.6776

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Tokyo Forex Market Information from BOJ