The Euro at Its Lowest Since 2020

On Tuesday, the euro fell to its lowest level versus the dollar since June 2020. The Russian rouble fell in volatile trading as Russia’s invasion of Ukraine continued and oil prices soared. The US dollar index(DXY) measures the greenback against a basket of currencies. Investors raced to safe-haven bets. Hence, the DXY rose and was last up 0.6 percent. The latest events in Ukraine have investors on edge. Russian commanders changed tactics to accelerate the shelling of Ukrainian cities, warning Kyiv citizens to evacuate their homes.

Brent oil futures closed at their highest level since August 2014, owing to fears of a global energy shortfall. Concerns about supply delays from Russia’s invasion of Ukraine were not alleviated by a worldwide agreement to release petroleum stockpiles. “The risk of a worldwide oil shock akin to the 1970s is increasing, and investors are fleeing to safe havens,” Karl Schamotta, chief market analyst at Cambridge Global Payments, said. “The euro is on the front lines here, the most vulnerable to energy shock,” he said, adding that the euro is weakening as oil and gas prices rise.

Highest Thread Since WWII

Russia’s invasion of Ukraine is the most serious attack on a European country since World War II, prompting Western penalties that include cutting Russian banks off from the SWIFT banking network and restricting Moscow’s ability to use its $630 billion in foreign assets.

After plunging to its lowest level since June 2020, the euro was last down 0.8 percent on the day at $1.1130. Against the Japanese yen, the euro was also down 0.9 percent.

Morgan Stanley (NYSE: MS) analysts stated in a Tuesday note that they were “neutral on the euro overall” and were closing trade recommendations for the long euro versus the US dollar, yen, pound, and Brazilian real.

The Russian rouble fell 1.34 percent against the dollar to 110.04 per dollar. Against the safe-haven yen, the dollar was down 0.1 percent. The Swiss franc has already reached its highest level versus the euro since 2015.

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