TOKYO (Reuters) – The rouble plunged to a record low on Monday and the dollar soared against most peers after Western nations announced fresh sanctions to punish Russia for its invasion of Ukraine, and President Vladimir Putin put its nuclear forces on high alert.The rouble dropped to as low as 119 per dollar in early trading, tumbling beyond its previous low of 90 roubles per dollar.It was last at 109.
The declines came despite Russia’s central bank announcing a slew of steps on Sunday to support domestic markets, after Western allies ratcheted up sanctions including blocking certain banks from the SWIFT international payments system.Restrictive measures on the Bank of Russia were also imposed to prevent it from deploying its international reserves to undermine sanctions.
Adding to nerves, Putin put Russia’s “deterrence forces” – which wield nuclear weapons – on high alert.
Elsewhere, the euro tumbled 1.1% to $1.1148.It was also down 1% on both the yen and the Swiss franc.
However, the dollar was the main beneficiary of the tension around Ukraine.The dollar index, which measures the currency against six peers, was up 0.83% at 97.368.
The greenback even gained a fraction on the yen, which was at 115.53 per dollar
“In the near term we think the dollar faces a risk of pushing above the 97.47 resistance level,” said Carol Kong, an FX strategist at Commonwealth Bank of Australia.
She said the extent of the dollar’s gains would depend on any further leap in volatility, the size of the sell-off in global equities, and assessments of central banks’ tightening programmes.
She noted that high energy prices were capping the yen, given Japan imports the bulk of its energy requirements.
Markets are now pricing in a 95% chance the U.S.
Federal Reserve will hike rates by 25 basis points at its March meeting, according to CME’s Fedwatch tool, with the invasion having put an end to speculation that the Fed will jump in with a 50 basis point hike.
Investors also believe the war will deter the European Central Bank from any strong tightening moves in the near term.
The Australian dollar slid 0.72% to $0.7180, the New Zealand dollar sank 0.76% to $0.6685, and sterling was slightly weaker at $1.335.
A top official at the Reserve Bank of New Zealand told Reuters in an interview it is too early to assess what impact, if any, the Russian invasion of Ukraine might have on policy, and that it has more work to do on interest rates to control inflation.
In cryptocurrency markets, bitcoin was in the middle of its recent range, trading just below $38,000.
(Reporting by Kevin Buckland; Editing by Shri Navaratnam and Kenneth Maxwell)
By Kevin Buckland and Alun John
© Reuters 2022 Stocks mentioned in the article Change Last 1st jan.AUSTRALIAN DOLLAR / CANADIAN DOLLAR (AUD/CAD) 0.34% 0.91961 0.19% AUSTRALIAN DOLLAR / EURO (AUD/EUR) 0.23% 0.64401 0.52% AUSTRALIAN DOLLAR / JAPANESE YEN (AUD/JPY) -0.10% 82.959 0.04% AUSTRALIAN DOLLAR / NEW ZEALAND DOLLAR (AUD/NZD) 0.03% 1.07401 0.98% AUSTRALIAN DOLLAR / SWISS FRANC (AUD/CHF) -0.11% 0.66514 0.97% AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.07% 0.71809 -0.39% BELIEVE 4.79% 13.348 -21.01% BITCOIN (BTC/EUR) 0.78% 33973.91 -14.80% BITCOIN (BTC/USD) 0.46% 37889.55 -15.48% BRITISH POUND / AUSTRALIAN DOLLAR (GBP/AUD) -0.06% 1.85969 -0.53% BRITISH POUND / EURO (GBP/EUR) 0.17% 1.19777 0.44% BRITISH POUND / JAPANESE YEN (GBP/JPY) -0.17% 154.279 -0.49% BRITISH POUND / NEW ZEALAND DOLLAR (GBP/NZD) -0.03% 1.9973 0.44% BRITISH POUND / SWISS FRANC (GBP/CHF) -0.16% 1.2369 0.43% BRITISH POUND / US DOLLAR (GBP/USD) -0.13% 1.33545 -0.91% CANADIAN DOLLAR / AUSTRALIAN DOLLAR (CAD/AUD) -0.34% 1.087429 -0.19% CANADIAN DOLLAR / EURO (CAD/EUR) -0.09% 0.700491 0.32% CANADIAN DOLLAR / JAPANESE YEN (CAD/JPY) -0.44% 90.203 -0.15% CANADIAN DOLLAR / SWISS FRANC (CAD/CHF) -0.45% 0.72311 0.78% CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.40% 0.78073 -0.57% CHINESE YUAN RENMINBI / SWISS FRANC (CNY/CHF) 0.14% 0.14687 1.94% COMMONWEALTH BANK OF AUSTRALIA -0.45% 93.46 -7.05% DANISH KRONE / SWISS FRANC (DKK/CHF) -0.01% 13.875 0.37% DOW JONES FXCM DOLLAR INDEX 0.35% 12260.39 0.45% EURO / AUSTRALIAN DOLLAR (EUR/AUD) -0.22% 1.55239 -0.51% EURO / JAPANESE YEN (EUR/JPY) -0.34% 128.788 -0.47% EURO / NEW ZEALAND DOLLAR (EUR/NZD) -0.19% 1.66728 0.46% EURO / SWISS FRANC (EUR/CHF) -0.34% 1.03253 0.45% EURO / US DOLLAR (EUR/USD) -0.28% 1.11482 -0.90% HONGKONG-DOLLAR / SWISS FRANC (HKD/CHF) -0.11% 11.857 1.19% INDIAN RUPEE / AUSTRALIAN DOLLAR (INR/AUD) -0.79% 0.018409 -0.45% INDIAN RUPEE / EURO (INR/EUR) 0.38% 0.01186 0.20% INDIAN RUPEE / JAPANESE YEN (INR/JPY) -0.54% 1.527907 -0.58% INDIAN RUPEE / SWISS FRANC (INR/CHF) -0.79% 0.012245 0.48% INDIAN RUPEE / US DOLLAR (INR/USD) -0.73% 0.013221 -0.83% JAPANESE YEN / SWISS FRANC (JPY/CHF) -0.02% 0.8007 0.92% NEW ZEALAND DOLLAR / JAPANESE YEN (NZD/JPY) -0.13% 77.242 -1.84% NEW ZEALAND DOLLAR / SWISS FRANC (NZD/CHF) -0.13% 0.6192 -0.80% NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) -0.09% 0.66858 -1.33% RUSSIAN ROUBLE / SWISS FRANC (RUB/CHF) -0.04% 0.011046 -9.31% SINGAPORE-DOLLAR / SWISS FRANC (SGD/CHF) -0.04% 0.6813 1.04% SWEDISH KRONA / SWISS FRANC (SEK/CHF) 0.05% 0.096752 -2.33% US DOLLAR / AUSTRALIAN DOLLAR (USD/AUD) 0.07% 1.392758 0.39% US DOLLAR / EURO (USD/EUR) 0.28% 0.897006 0.91% US DOLLAR / JAPANESE YEN (USD/JPY) -0.05% 115.52 0.43% US DOLLAR / RUSSIAN ROUBLE (USD/RUB) -0.02% 83.8898 11.49% US DOLLAR / SWISS FRANC (USD/CHF) -0.08% 0.9262 1.32%.
