The Euro began to strengthen from a 22 -month low on Tuesday as the war in Ukraine began to hit European economic prospects, while currencies sensitive to rising commodity prices were volatile.
The war between Russia and Ukraine has led to increased demand for safe haven assets with the US dollar strengthening around 3% in nearly two weeks as the crisis escalates.
Russian attacks in Ukraine continued on Tuesday but at a slower pace and Ukrainians informed that their citizens from some of its cities had been evacuated.
The crisis has led to soaring energy prices and concerns about inflation and the possibility of affecting the global economic recovery.
The Euro rebounded today after depreciating by five sessions against the US dollar. It rose more than a cent from Monday’s $ 1.08060 level-the lowest level since March 2020 when the COVID-19 outbreak gripped Europe.
The US dollar index, which measures the US dollar against major currencies, began to decline slightly by 0.18% to 99.120.
Traders expect the market to continue to be turbulent with the volatility of the Euro against the US dollar. Oil prices rose on Tuesday, with Brent prices soaring past $ 127 a barrel, as the possibility of official U.S. restrictions on Russian oil exports prompted concerns over supply.
Analysts expect supply shocks to continue and hold growth. Markets are also paying close attention to the ECB meeting on Thursday which will discuss staffing which has prompted economists to suggest policymakers are likely to delay rate hikes until later this year.
