By Joice AlvesLONDON, Feb 22 (Reuters) - The euro one-month volatilitylevel jumped on Tuesday to its highest in 15 months, as thesingle currenc
By Joice Alves
LONDON, Feb 22 (Reuters) – The euro one-month volatility
level jumped on Tuesday to its highest in 15 months, as the
single currency was hit by rising risk aversion amid a gas price
surge and escalation of tensions in Ukraine.
Russian President Vladimir Putin ordered troops to two
breakaway regions in Ukraine, sending the euro one-month
volatility to its highest level since November 2020,
as the West vowed sanctions in response to Putin’s troops in
Ukraine.
The euro edged 0.2% higher versus the dollar to
$1.1331 by 0910 GMT, after touching an eight-day low.
“The surge in European gas prices and the rise in concerns
over Russian supplies to the region poses a risk to growth in
Europe and therefore has the potential to significantly impact
the timing of ECB (European Central Bank) policy tightening
going forward, which is a EUR negative factor,” said Jane Foley,
head of FX strategy, at Rabobank in London.
As Putin’s move accelerated a crisis the West fears could
unleash a major war, the Russian rouble climbed back
above 80 to the dollar to its highest level since November 2020.
Ukraine’s hryvnia currency fell 1% to a seven-year low.
In the meantime, safe-haven currencies were in demand. The
yen hit a near three-week high and the Swiss franc
versus the dollar remained near a one-month high
reached on Monday.
The yen edged about 0.1% higher 114.8 after briefly touching
114.50 to the dollar, while the Swiss franc slipped
0.4% versus the euro at 1.039, after hitting one-month high of
1.0339 versus the single currency.
The euro drifting back below 1.04 versus the Swiss franc
confirmed market concerns that any escalation of the Ukraine
crisis would weigh on the euro zone, analysts said.
“Although there is already a lot of bad news baked into the
price, tensions in Ukraine have the capacity to push EUR/CHF
back to the recent 1.03 low,” said Rabobank’s Foley.
Another safe haven, the U.S. dollar, edged 0.1%
lower at 96.013 against a basket of currencies including the
euro, as investors await further developments in the crisis.
The U.S. and its European allies are poised to announce
sanctions against Russia on Tuesday.
Cryptocurrencies were also under pressure, with bitcoin
dropping to an almost three-week low of $36,370.
(Reporting by Joice Alves
Editing by Raissa Kasolowsky)
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