Peter Nurse

Investing.com – The U.S. dollar edged lower Tuesday while the euro traded marginally above the previous session’s 22-month low as the war in Ukraine threatens the European growth outlook. 

The, which monitors the greenback against six currencies in a basket, was trading at 99.275 ET (755 GMT) and is still strong as a safety haven given the intensifying Russia-Ukraine war.

The euro rose 0.1% to 1.0863. This attempt at a recovery following almost a week’s selling failed. However, it remains close to Monday’s low of 1,0806 which suggests that any support for the currency is very half-hearted. Since Russia’s invasion of Ukraine, the euro fell 4% against USD.

“How low could EUR/USD go? It appears that support levels are around the 1.0760/70 zone and then at the March 2020 lows 1.0640. But, these big figures may be needed sometimes like this. 1.0500 become more relevant,” said analysts at ING, in a note.

And it’s not only the dollar that the single currency has seen hefty selling against, as it briefly traded at parity with the Swiss franc on Monday for the first time in seven years.

The Swiss National Bank stated that it was ready to act and deal with the rapidly increasing franc.

On Thursday, The (ECB), meets. However, it is not likely that the single currency will be given support as the possibility of slowing regional growth due to the Ukraine conflict or rising commodity prices could cause policymakers delay raising rates until the end of the year.

It is unlikely that the ECB will intervene on its own to support the euro.

“Were things to get out of hand, we would think coordinated G5 intervention to support EUR/USD would be more likely than ECB own account intervention,” added ING. “But that may not occur until closer to parity.”  

The Federal Reserve meets next week, and Chairman last week backed a quarter-point rate increase while telling Congress he would move more aggressively later if inflation didn’t abate.

The stock market traded 0.1% higher at 115.33, with a gain of 0.1% to 1.3108. This is close to the 16-month high, and a drop of 0.4% to 0.7285. It has lost some recent gains.

was indicated 4.1% lower at 130.00, with the ruble benefiting from the lack of solidity between Western governments on a move to ban Russia’s oil imports.

rose 0.1% to 4.5865 ahead of the latest policy-setting meeting of Poland’s central bank, which is expected to result in interest rates rising 50 basis points to 3.25%.

This move will help to support the zloty, which plunged to a record low against the euro as the fallout from Russia’s war on Ukraine spreads.