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Euro test support as Ukraine crisis looms over growth – SABC News

The euro came under pressure on Wednesday as intensifying Russia’s bombing of Ukraine’s cities and rising oil prices worried investors about a hit for Europe’s economy and growth.

The common currency fell briefly below support to reach a 21-month low of $ 1.1090 overnight, before recovering slightly to trade at $ 1.1131 early in the Asian session.

“The risk is a sustained move below $ 1.1106 as market participants downgrade the economic outlook of the eurozone,” said Kim Mundy, analyst at Commonwealth Bank of Australia.

Sterling, which fell 0.7% overnight, was also squeezed at $ 1.3327.

Russia on Tuesday bombed a TV tower in the Ukrainian capital and fired rockets at the city of Kharkiv.

Ammunition experts said cluster munitions were also used in Kharkiv.

The safe haven yen was solid, following a risk-averse mood in other markets and was last just above its 50-day moving average at 114.85 per dollar.

The Russian ruble, which hit a record low of 117 against the dollar on Tuesday when Western sanctions hit, remained on the cheaper side of 100.

Commodity-linked currencies, such as the Australian dollar, fell slightly against a stronger dollar overnight, but held their own as rising prices for oil, gas, coal and grain provided support.

The New Zealand dollar hovered at $ 0.6760 in morning trading and the Australian dollar rose to $ 0.7263.

The US dollar index stood at 97,324.

Chinese traders are scaling back Russian coal imports as they struggle to secure funding from state-owned banks worried about potential sanctions, pushing prices higher from Australia and other exporters such as Indonesia and South Africa.

“The strength of commodity prices combined with Australia’s much improved current account position suggests that there is good reason to expect AUD / USD to break with its traditional role of a ‘higher risk’ G10 currency,” said Rabobank strategist Jane Foley, who ‘ t expects it to climb to $ 0.74 by the end of 2022.

Later in the session, US President Joe Biden delivers his speech on the state of the Union.

He will say that the West was ready for Russia’s invasion of Ukraine and his administration has a plan to combat inflation, according to speech fragments.

European inflation data are available at 1000 GMT.

A speech at 1600 GMT by the European Central Bank’s chief economist, Philip Lane, will also be closely watched for insight into policymakers thinking about the economic damage of the Ukraine crisis.

Bank of England policy maker Silvana Tenreyro will talk about the UK economic outlook at 1800 GMT.

China’s yuan was stable in offshore trading at $ 6.3166 per dollar, after weakening slightly on Tuesday. In emerging markets, the currencies of Eastern Europe were overnight from sharp losses.

Bitcoin has meanwhile recovered from last month’s lows and last held around $ 44,500, its progress somewhat stumped by the strength of the dollar.

Euro test support as Ukraine crisis looms over growth – SABC News

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