Tom Westbrook

SINGAPORE (Reuters – On Wednesday, dollar held back as hope for a breakthrough at Russia-Ukraine talks lifted euro. The under-pressure yen remained steady despite Bank of Japan intensifying efforts to keep bond yields down.

Fear of economic collapse in Ukraine, and nervousness about possible conflict spreading west have battered the euro in the last weeks. The overnight high at $1.1137 was reached in the euro before it retreated to $1.1091 in Asia.

Common currency also leapt through the 200-day moving mean on the pound, reaching a three month high of 84.81 pennies. Russia’s ruble soared to an one-month peak of 83.50 per dollar.

Russia promised to reduce military operations in Kyiv, and Ukraine suggested adopting neutral status as a sign that there has been progress in face-to-face talks in Istanbul.

U.S. officials put a damper on the hopes of reaching a settlement by telling Kyiv that they aren’t done with them.

Joe Capurso, strategist at Commonwealth Bank of Australia (OTC) said that “at least the two parties are talking.”

According to him, “The tentative positive news about the war” will be more beneficial for the euro than any other currency because of Europe’s dependence on Russian oil and its proximity to it.

This mood proved to be beneficial for currency-sensitive currencies, such as New Zealand and Australian dollars. The were steady just below their morning peak at $0.7512, and $0.6946. [AUD/]

It saw its strongest session in almost two years yesterday, thanks to the surge in oil prices that began just over one month ago.

The yen is battling to maintain a level of 123 against the dollar.

It’s on course for its worst month in a year since November 2016. The loss of around 7% on the dollar was caused by Japan’s central banks increasing their dovish posture while the rest the world becomes hawkish.

After already making a pledge for unlimited bond purchases to maintain 10-year yields under its 0.2% ceiling, the BOJ stepped up by increasing both the purchase and selling more bonds.

Although the 10-year Japanese government bond yield fell to 0.225% after an initial drop, the yen remained steady at 122.66 dollars.

For today, the risk is still tilted in favor of the upside. Sophia Ng, an analyst from MUFG bank in Singapore, stated that the 125.00 mark would continue to provide good topside resistance.

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Prices for currency bids at 0054 GMT

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

Previous changes

Session

Euro/Dollar

$1.1096 $1.1086 +0.06% -2.43% +1.1100 +1.1080

Dollar/Yen

122.5650 122.8950 -0.26% +0.00% +123.2000 +122.5800

Euro/Yen

135.99 136.22 -0.17% +4.35% +136.6700 +136.0200

Dollar/Swiss

0.9306 0.9307 +0.03% +2.07% +0.9313 +0.9309

Sterling/Dollar

1.3097 1.3095 +0.01% -3.16% +1.3102 +1.3091

Dollar/Canadian

1.2503 1.2503 +0.03% -1.09% +1.2508 +1.2496

Aussie/Dollar

0.7510 0.7508 +0.04% +3.32% +0.7524 +0.7507

NZ

Dollar/Dollar 0.6944 0.6935 +0.13% +1.45% +0.6948 +0.6933

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