By Gina Lee
Investing.com – The dollar was down Tuesday morning in Asia, while the euro was stuck near a 22-month low. Russia’s invasion of Ukraine continues to cloud Europe’s economic outlook, but a week-long rally in commodity-linked currencies has shown signs of pausing.
The trailing greenback against a basket of other currencies edged down 0.16% to 99.135 at 10:30 p.m. ET (0330 GMT).
The pair edged up 0.13% to 115.44. The start of the day showed the largest current account deficit since the start of 2014, with the at 1.189 trillion JPR ($10.33 billion) and the at 0.19 trillion JPY in January 2022.
The pair edged up 0.10% to 0.7324, with Australia at 13 in February. The pair remained stable at 0.6831.
The pair edged down 0.13% to 6.3126 while the pair edged down 0.18% to 1.3125.
The euro remained close to Monday’s low of $1.0806, despite efforts to rebound from six consecutive selling sessions. The single currency is down 4% against the dollar since Russia invaded Ukraine on February 24, with the conflict showing no signs of ending. The euro approached parity with the Swiss franc on Monday, the first time in seven years that it has done so.
Little progress has been made during the two rounds of peace talks between Russia and Ukraine. Germany’s opposition to a ban on Russian energy imports knocked oil futures from Monday’s 14-year high, but the supply shock will hurt European growth, some investors have warned.
“Markets could continue to price the risk of a disruption in Russian energy exports and downgrade the outlook for European growth,” Commonwealth Bank of Australia strategist Carol Kong told Reuters.
“As such, we expect the euro to remain under pressure. There is a reasonable chance that the euro/dollar will test the COVID-19 low of $1.0688 this month.”
Investors are now awaiting the decision of the European Central Bank, which is due on Thursday. The possibility of stagflation has prompted economists to speculate that the central bank could delay interest rate hikes until the end of 2022.
Along with the meteoric rally in commodities, the conflict in Ukraine and ensuing Western sanctions saw the ruble fall to a record low of 160 to the dollar in erratic offshore trading on Monday. Other Russian assets were also affected, although the US dollar remained firm on fears that the war could be prolonged, and the economic blow could also spread.
In Asia-Pacific, the Australian and New Zealand dollars rose early in trade but were below Monday’s four-month highs.
The New Zealand dollar jumped 4.5% in just over a month as the Reserve Bank of New Zealand launched a series of interest rate hikes. Energy price pressures could lead to back-to-back 50 basis point increases in April and May, ANZ Bank analysts said on Tuesday.
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