LONDON, March 3 — The euro slid to its lowest level in almost six years against Britain’s pound and was pinned near 21-month lows versus the dollar as a fresh surge in energy prices heightened worries about the euro area economic outlook.
With Brent crude hitting a nine-year high above US$119 (RM498) per barrel, a dash for resources also gave commodity-linked currencies a lift, with Australia’s dollar climbing to its highest since November. Read full story
But it was the euro that took the spotlight as it fell to 82.76 pence as London trade got underway. That was the lowest level against sterling since July 2016.
The single currency was down a third of a per cent at US$1.1083, holding near yesterday’s low of US$1.1058, its lowest since May 2020. It is down 1.5 per cent for the week so far and is heading for a fourth consecutive weekly loss against the US dollar.
“It’s still going down,” said Kit Juckes, chief global currency strategist at Societe Generale in London, referring to the euro. “Look at gas prices. This is the clinch point in terms of the economic impact of the war, and it is going to hurt.”
Euro zone inflation hit a record high of 5.8 per cent last month, data yesterday showed. The problem for the European Central Bank, which meets next week, is that while the war in Ukraine is likely to boost inflation further, it is a negative for both growth and inflation in the longer term.
The Australian dollar rose to its highest since mid-November at US$0.7323 AUD=D3 and was last up 0.2 per cent, as prices for Australian exports such as coal NCFMc1, gas LNG-AS and grains Wv1 soar on signs that sanctions against Russia are severely disrupting global supplies. Read full story
“Soaring commodity prices means commodity-focused currencies not directly linked to the escalating geopolitical tensions like the Aussie and the Kiwi are doing well,” said Aaron Hurd, senior portfolio manager, currency, at State Street Global Advisors.
The New Zealand dollar NZD=D3 held near yesterday’s one-week top of US$0.6798.
And the dollar appeared well-supported after Federal Reserve Chair Jerome Powell said yesterday the central bank would begin “carefully” raising interest rates this month, but was ready to move more aggressively if needed. Read full story
The dollar index was up 0.1 per cent and the dollar itself was almost a quarter of a percent firmer at ¥115.79, while sterling slipped 0.13 per cent to US$1.3387.
Canada’s dollar meanwhile rose to a five-week high of CUS$1.25870 per dollar, a day after the Bank of Canada’s first interest rate hike since 2018.
Elsewhere, the Russian rouble slid to a fresh record low at around 118.35 in Moscow trade after ratings agencies Fitch and Moody’s downgraded Russia to “junk” status, citing the impact of Western sanctions. Hungary’s forint was weaker but holding below Wednesday’s record lows against the euro as the country’s central bank raised its one-week deposit rate NBHK by 75 basis points to 5.35 per cent at a weekly tender on Thursday. That was the biggest rate hike since 2008 as the war in Ukraine roiled Hungarian markets.
Bitcoin edged lower to around US$43,447 as an early-week bounce lost steam. — Reuters
Source: Malay Mail
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