The crisis in Ukraine is dampening prospects for European economic growth. Hence, on Friday, the euro hit a seven-year low against the Swiss franc and a nearly two-year low against the dollar. This week, the euro lost 2.1%, putting it on track for its lowest week since April 2020. It was down 0.5% to $1.1010 at 0850 GMT, approaching its lowest level since May 2020, after Ukrainian officials reported on Friday that Russian forces captured Europe’s largest nuclear power facility after a building at the complex was set ablaze amid combat with Ukrainian defenses.
Russia Targeting Nuclear Plants
According to authorities, they extinguished the fire in a structure labeled as a training center. According to US Energy Secretary Jennifer Granholm, there were no signs of higher radiation levels at the facility. Compared to sterling, the euro fell to 82.61 pence, its lowest level since July 2016. It fell to 1.0114 versus the safe-haven Swiss Franc, its lowest level since January 2015. The consequences of rising energy and gas costs, according to analysts, would undoubtedly stifle European consumption and growth prospects.
After reaching its highest level versus a basket of peers since June 2020, the US dollar index surged 0.36% to 98.073. Money markets do not expect interest rate rises at the ECB’s next meeting; however, the Federal Reserve of the United States should raise rates for the first time since the coronavirus outbreak on March 15-16. Jerome Powell, the chairman of the Federal Reserve, reiterated his support for a quarter-point hike in the benchmark rate. Russian armies pressed forward in Ukraine, encircling and assaulting cities.
In other news, the Australian dollar climbed 0.6% to a four-month high of $0.7370 against the US dollar; it was aided by the commodities boom. Because Japan is a net importer of energy, high energy costs have stopped the Japanese yen from gaining as much from the haven flows. When word of the fire broke, the yen momentarily rose against the dollar; however, it eventually lost those gains and was at 115.37 per dollar.
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