The euro extended its falls across the board today and was poised for its biggest weekly drop in seven years against the Swiss franc as investors dumped the single currency as the war in Ukraine intensified.
Europe’s economy is the most vulnerable to the Russian invasion of Ukraine and investors have ramped up selling of the single currency this week as the outlook for the economy darkened.
Against the Swiss franc, the euro fell 0.7%, taking its losses to more than 3% this week and putting it on track for the biggest weekly drop since January 2015.
It was last trading at 1.008 francs per euro.
The euro also weakened 0.8% against the dollar, falling below $1.10 for the first time since May 2020. It is down more than 2.6% this week and on track for its biggest loss since April 2020.
A huge blaze at the site of Europe’s biggest nuclear power station was extinguished today, and officials said the plant in southeastern Ukraine was operating normally after it was seized by Russian forces in fighting that caused global alarm.
“The euro has come under strong selling pressure, breaching the 1.1000 level against the US Dollar for the first time since May 2020 and trading as low as 82.6p against the Pound, a level unseen since the time of the Brexit Referendum,” Ronan Costello, Associate Director, Corporate & Markets at Bank of Ireland explained.
The European Central Bank policy committee meets next week at which interest rates will be discussed.
The bank is not expected to raise rates, despite inflation across the euro zone rising to almost 6% on an annual basis in the most recent figures from the European Statistics Agency.
“Prior to the Ukraine invasion, markets would have been expecting a hawkish pivot from the ECB at this meeting, but with the on-set of war and a rapid escalation in economic sanctions hanging over the Eurozone economy, President Lagarde will probably choose to navigate a more dovish path,” Mr Costello said.
Accreditation: Reuters
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