Euro Nears 22-Month Low as Ukraine Crisis Deepens

The euro traded near 22-month lows on Tuesday as the war in Ukraine led to a pessimistic economic outlook for Europe, while currencies that had surged on a sharp increase in energy prices stalled after a weeks-long rally.

Russia’s invasion of Ukraine has boosted demand for assets seen as safer, with the dollar, the global reserve currency, rising nearly 3 percent in nearly two weeks as the crisis intensified.

The euro regained strength on Tuesday after falling for five sessions, but it is still near the low of $ 1.08060 that it hit on Monday, its lowest level since March 2020 when the Covid-19 pandemic ravaged Europe.

The Russian offensive in Ukraine continued on Tuesday, but at a slower pace. Russia describes its actions as a “special military operation”.

The crisis led to a sharp rise in energy prices and concerns about inflation and the possibility of harming the global economic recovery.

The dollar index was largely stable on Tuesday at 99.146, while the euro rose 0.2 percent to $1.08795.

And the pound rose 0.2 to 1.31270 dollars after falling to a new low, the lowest in 16 months, at 1.30830 dollars earlier in the trading session.

The yen slipped slightly to 115.57 per dollar.

The Australian and New Zealand dollars fell from their highest levels in four months recorded on Monday.

The Australian dollar was last down a third of a percent at $0.72905, while its New Zealand counterpart was largely flat at $0.68290.