By Alun John

HONG KONG (Reuters – After Russia’s invasion in Ukraine, the euro plunged on Friday and investors fled to safety, fleeing to the safety and security of the dollar and yen.

Russia’s ruble also plunged overnight. After falling to record lows of 89.986 USD, it recovered a little.

After falling from $1.13045 on Wednesday, the euro fell to $1.1196 on Thursday.

Sterling and the more risk-friendly Australian Dollar were also blasted, while the U.S. dollars lost ground against the yen (and the Swiss franc).

It rose to 97.740, which is the highest it has been since June 2020. The last time it was at 96.990.

Russia unleashed Thursday’s largest attack on an European state since World War Two. This prompted tens to thousands of people fleeing their homes. Ukrainian forces were fighting on several fronts.

US responded by imposing a series of sanctions on Russia, which included sanctions against state-owned banks and financial institutions.

RiadChowdhury APAC, head of MarketAxess’ credit trading platform said that while Russia and Ukraine are the obvious first orders affected, “there is also an impact in Asia Pacific on foreign and bond markets.”

Chowdhury spoke of a “flight from quality” movement in global assets, such as the dollar/yen and emerging markets.

After falling 0.48% against the Japanese currency, Friday’s one dollar equaled 115.47 Japanese yen. Following a 0.85% drop the day before, the US dollar stood at 0.9241 against Swiss Franc.

As both currencies tried to rebound from Thursday’s pummelling, the pound stood at $1.33840 while the Australian dollar was $0.7153.

The war in Ukraine had a direct effect on currency traders, but they also tried to determine the effects of it on the monetary policies around the globe.

Many policymakers from the European Central Bank (ECB) said that the Ukraine situation could force the ECB into a slower exit from its stimulus programs.

Investors and U.S. officials indicated that the war will likely slow down, but it would not stop at approaching interest rate increases.