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Russia’s invasion of Ukraine has implications for the money market. The single currency suffers against safe havens.
Shortly after noon, one euro was worth 1.0079 francs.
20min/Simon Glauser
The single European currency fell below the symbolic threshold of 1.10 dollars for one euro on Friday and fell sharply against other safe havens, the Swiss franc and the yen, as investors protected themselves from the consequences of the invasion of Ukraine by Russia.
Thus, the euro lost 0.81%, to 1.0977 dollars, around 12:40 p.m., a level not seen since the first months of the Covid-19 pandemic, almost two years ago. Against the Swiss currency, the euro lost 0.7% to 1.0079 francs. The two European currencies had not been so close to parity since January 2015, when the Swiss National Bank had abandoned the floor rate of one euro for 1.20 francs, in force since September 2011. The euro also yielded 0 89% against the yen, at 126.64 yen, a level not seen for more than a year.
“Vladimir Putin’s war affects the whole world, but the United States much less than Europe.”
“The exchanges are strongly influenced by the Russian attack on the largest nuclear power plant in Europe (in Zaporijia, Ukraine, editor’s note), during the night”, explains Walid Koudmani, analyst at XTB.
NATO on Friday condemned the “irresponsible” bombings by Russian forces against the power plant and new sanctions against Moscow are being considered. French Foreign Minister Jean-Yves Le Drian has called for “continuing the isolation” of Russia, and the European Union will discuss on Friday the possibility of imposing new sanctions against Moscow, in particular on the Russian energy, for the moment spared.
“Slower growth”, “higher inflation”
The economy of the euro zone is particularly dependent on Russian exports, and the euro was therefore faltering even more, particularly against safe havens. “Vladimir Putin’s war affects the whole world, but the United States much less than Europe”, summarizes Holger Schmieding, analyst at Berenberg. For the Old Continent, the consequence of the war will be “lower growth and even higher inflation”.
Among the other currencies affected by the conflict, the Russian currency fell again against the greenback (-2.2%, to 111.95 rubles per dollar).
(AFP)