Dollar Down, Currency Markets Fixated on Ukraine Conflict By

By Gina Lee

Investing.com – The dollar was down on Monday morning in Asia, with currency markets monitoring the ongoing tensions over Ukraine. The safe-haven yen was not far from a two-week high while the euro was on edge as investors calculated the energy security and economic implications for Europe in the event of a Russian invasion.

The that tracks the greenback against a basket of other currencies was down 0.21% to 95.820 by 10:27 PM ET (3:27 AM GMT).

The pair inched down 0.03% to 114.97.

The pair gained 0.49% to 0.7208 and the pair was up 0.29% to 0.6719.

The pair was steady at 6.3255 and the pair was up 0.23% to 1.3622.

“Russia-Ukraine tensions are starting to dominate risk sentiment and price action. The market is likely to keep chasing headlines without any clarity on the eventual outcome,” said Barclays analysts in a note.

In a reflection of the situation, the euro got a small boost early in the Asian session as U.S. President Joe Biden and Russian President Vladimir Putin agreed “in principle” to to discuss Ukraine. However, the summit would not take place should Russia invade Ukraine.

Meanwhile, the yen lost a little bit of ground on the dollar following the announcement. However, safe-haven assets such as the yen and Swiss franc benefitted from investors’ risk aversion due to the tension in Eastern Europe.

The euro traded 0.12% higher at $1.13340, after falling earlier in the session in reaction to Sunday’s announcement from the Belarusian defense ministry that Russia would extend military drills in Belarus.

Central banks’ policies also remain on investors’ radars, with the People’s Bank of China’s loan prime rates due later in the day. The will hand down its policy decision on Wednesday and the will hand down its policy decision a day later.

Outside Asia Pacific, Bank of England (BOE) Governor Andrew Bailey will appear before the Treasury Committee on Wednesday. Several U.S. Federal Reserve policymakers will also speak throughout the week, with investors looking for clues that a large 50 basis point rate hike could come at the Fed’s March 2022 meeting, instead of the more widely expected 25 basis point increase.

The BOE is also widely expected to hike rates again at its March meeting, giving the pound some support although the situation in Ukraine perhaps capped gains.