Euro Drops To Lowest Since June 2020 As Russia's Invasion Of Ukraine Moves Forward

Chinese yuan banknote is displayed on U.S. Dollar banknotes in this illustration taken, February 14, 2022. Reuters / DADO RUVIC

The euro hit its lowest against the U.S. dollar since June 2020 on Tuesday and the Russian rouble was down in volatile trading as Russia's invasion into Ukraine intensified and oil prices surged.

The U.S. dollar index, which measures the greenback against a basket of currencies, jumped and was last up 0.8%.

Investors were on edge over the latest Ukraine developments. Russia warned Kyiv residents to flee their homes, and Russian commanders shifted tactics to intensify the bombardment of Ukrainian cities.

U.S. stocks were down sharply in midday New York trading and the U.S. Treasury yields earlier dropped to five-week lows.

"The likelihood of a '70s-style global oil shock is growing, and investors are moving to safe havens as fast as they can," said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto. "The euro is on the front lines here, most exposed to energy shock," with the euro falling as oil and gas prices jump.

Russia's invasion of Ukraine is the biggest assault on a European state since World War Two, and has resulted in Western sanctions that include cutting off some Russian banks from the SWIFT financial network and limiting Moscow's ability to deploy its $630 billion of foreign reserves.

The Russian rouble weakened 6.73% versus the greenback at 114.29 per dollar, according to Refinitiv data.

The euro was last down about 1% on the day at $1.1104 and fell to its lowest level since June 2020..

The dollar was down 0.1% against the safe-haven yen.

Earlier, the Swiss franc hit its strongest level since 2015 against the euro.

The Swiss National Bank's sight deposits were little changed in February, suggesting the central bank may have given up its attempts to slow the franc's appreciation.

Bitcoin was up about 4%..

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Currency bid prices at 12:03PM (1703 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index

97.4710 96.7420 +0.76% 1.890% +97.5050 +96.6240

Euro/Dollar

$1.1104 $1.1220 -1.03% -2.33% +$1.1233 +$1.1099

Dollar/Yen

114.8900 114.9700 -0.07% -0.20% +115.2850 +114.7100