Prospects Of Russian-Ukraine Confrontation, The Euro’s Gains

After the Kremlin claimed there were no solid arrangements for a conference between Russian and US presidents over Ukraine, the euro’s gains faded and the dollar gained a safe-haven bounce on Monday. Investors cautiously bought equities and the euro over the weekend after rumors that Vladimir Putin and Joe Biden had agreed in principle to negotiate a possible road out of Europe’s largest military crisis in decades. They pulled money out of safe-haven shelters like the yen and government debt. However, recent news, as well as concerns of border conflicts, encouraged investors to seek refuge. “Tensions are running high,” said Kenneth Broux, a Societe Generale FX strategist (OTC:SCGLY).

The euro currency fell half a percent against the safe-haven Swiss franc, hitting a three-week low of 1.0384 francs per euro. The euro, which had been up 0.6 percent at one point during early London trade, has gradually given up those gains and was now just up 0.1 percent at $1.1336.

Impact on Dollar

The dollar index, on the other hand, had regained most of its losses and was only down 0.13 percent versus key rival currencies at the moment. European stock markets moved dramatically negative after beginning in positive position, echoing the mood swing over the likelihood of a de-escalation, with a barometer of European stock market volatility reaching its highest level since November 2020.

Safe-have currencies, on the other hand, which have benefitted from the tensions sparked by Russia’s military buildup on Ukraine’s borders, have regained favor. Against a broadly strong US dollar, the Swiss franc gained 0.54 percent to $0.9164.

Bitcoin, which had been recovering after a little setback over the weekend, battled to stay in the green, hovering around $38,500. While the fate of talks to find a peaceful solution to the Ukrainian conflict remains unknown, further volatility is predicted in the coming months. Since February 2021, a measure of currency market volatility has been nearing all-time highs.

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