By Alun John

HONG KONG (Reuters – On Thursday the euro touched a one month high against the US dollar. The rally was driven by hopes that Ukraine’s war might enter a new phase. However, the yen recorded its worst monthly performance since November 2016.

European single currency stood at $1.1175, holding its highest point in a month. This week’s gain of 1.7% saw it reach its highest ever level.

Carol Kong, a FX strategist at Commonwealth Bank of Australia, stated that “the euro has been one of our biggest winners over these past sessions,” which partly reflects positive news about Russia Ukraine tensions.

Kong stated that sustained Euro gains will depend on developments in Ukraine.

Russia announced at peace talks in Istanbul this week that it will curtail operations close to Kyiv as well as the northern city Chernihiv. This was to foster trust. But Ukraine and its Western allies dismiss Russia’s offer to stop losses and plan for more attacks.

On Thursday, President Volodymyr Zeleskiy stated that Ukrainian forces were preparing to face new Russian aggressions in the East of Ukraine.

The euro saw gains and a short recovery of the Japanese currency. However, the Canadian dollar was strong, so the overnight low fell to 97.681, its lowest in three weeks.

It reached 97.778 Thursday morning.

The yen fell again on Thursday with the dollar rising 0.5% to 122.45yen.

This month has seen a sharp fall in the Japanese currency. It dropped to its lowest point since November 2015, Monday. However, it recovered slightly over the next few days.

Bank of Japan intervention to keep government bond yields falling too high has reinforced contrast with the rising rate in the United States and caused the yen’s fall.

This month will be its most difficult since November 2016.

CBA’s Kong said that Thursday’s movements in Japanese assets will likely be slow, given the close of the fiscal year.

Sterling was steady at $1.3143 and the dollar at $0.7509, both holding their 3.3% gain, but struggling to climb higher.

The price of bitcoin in cryptocurrency markets was $47,240, which is not too far away from the $48,234 year-to-date high reached earlier this week.