Monday, February 28, 2022

Rouble set to dive, euro slides after West steps up Russia sanctions

The rouble was indicated as low as 119 per dollar, a more than 29 per cent tumble. — Reuters pic
The rouble was indicated as low as 119 per dollar, a more than 29 per cent tumble. — Reuters pic

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TOKYO, Feb 28 — The Russian rouble was set to plunge nearly 30 per cent to all-time lows versus the dollar today, while the euro sank after Western nations announced fresh sanctions to punish Russia for its invasion of Ukraine, including blocking some banks from the SWIFT international payments system.

Safe haven currencies including the US dollar and yen were in demand after Russian President Vladimir Putin put nuclear-armed forces on high alert yesterday, the fourth day of the biggest assault on a European state since World War Two.

The rouble was indicated as low as 119 per dollar, a more than 29 per cent tumble.

The euro declined 0.83 per cent to US$1.1181, after earlier falling as much as 1.34 per cent. The single currency lost 0.72 per cent to ¥129.32, and was 0.67 per cent lower at 1.03655 Swiss franc.

“The escalating crisis in Ukraine will force markets to price in a substantially higher geopolitical risk premium, (and) that is going to leave safe havens like the USD bid,” Westpac strategists wrote in a client note.

“The Ukrainian situation is volatile, and so too is market sentiment, although a risk-averse backdrop near term appears the most prudent assumption,” meaning more downside for Australian and New Zealand dollars, they said.

The Aussie slid 0.76 per cent to US$0.71795, while New Zealand’s kiwi sank 0.82 per cent to US$0.6689.

Sterling slipped 0.29 per cent to US$1.3368. — Reuters




Source: Malay Mail

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