The euro, which has been under pressure owing to concerns about the economic impact of the Ukraine conflict, fell 0.15 percent against the dollar at 0755 GMT to $1.1031 at the time of writing, not far from its almost two-year low of $1.0806. It lost 0.24 percent against sterling to 84.05 pence, a six-day low. French President Emmanuel Macron called for a fresh round of sanctions on Russia; he cited overwhelming evidence that Russian soldiers had committed war crimes.
Peace talks between Russia and Ukraine dragged on; moreover, stories of Russian crimes prompted German Defense Minister Christine Lambrecht to suggest that the European Union discuss halting Russian gas imports.
Fuel Supply and Sanctions
Russia provides over 40% of Europe’s gas demand. Ukraine has accused Russian soldiers of carrying out a “massacre” in Bucha, which Russia’s defense ministry has denied. Russia’s chief investigator has requested an official investigation into a “provocation” in Ukraine.
Rising Treasury rates supported the U.S. dollar index, which measures the greenback against a basket of rivals, including the euro, amid expectations of quick U.S. interest rate rises. At 98.659%, it was up 0.05 percent. On Friday, data indicated that unemployment in the United States fell to a two-year low of 3.6 percent last month; this prompted investors to believe that the figures will bolster the Federal Reserve’s commitment to combat inflation by raising interest rates considerably. Fed funds futures are pricing in a nearly 4/5 likelihood of a 50-basis point rise next month; meanwhile, two-year U.S. rates have soared to their highest level since March.
Mainland Chinese markets were closed for a national holiday due to fears over the longer lockdowns in Shanghai; authorities plan to virus test all 26 million citizens; hence, the yuan is under pressure in offshore trade.