The euro rose on Tuesday while the greenback’s losses deepened after reports some Russian troops in areas near Ukraine started returning to their bases.
Against the U.S. currency, the euro gained 0.4% to $1.1354, and within striking distance of Monday’s high of $1.1369, as European stock markets rebounded on the news while bond yields headed higher.
On Tuesday, Russia’s defense ministry made an important announcement. According to the defense ministry, some troops are returning to the bases after completing drills. Russia’s decision has the potential to improve the situation.
The rouble benefited from the ministry’s announcement. It jumped as much as 2% on the news. Investors also got rid of safe-haven currencies like the yen as well as the franc. The Japanese yen registered its second biggest daily rise this year several days ago on Friday on rising tensions.
Euro and tensions
Rising geopolitical tensions restrained the euro’s gains in recent days. Geopolitical risks kept a lid on its gains even as the European Central Bank joined its central bank peers in signaling a hawkish turn in its monetary policy at a meeting this month.
The euro fell to its lowest point in two weeks on Monday. The single currency declined after Ukrainian President Volodymyr Zelenskiy called on citizens to fly the country’s flags from buildings and sing the national anthem in unison on February 16, a date some Western media cited as a possible start of a Russian invasion.
The British pound also rose on Tuesday. The pound advanced on growing expectations that the Bank of England was likely to raise interest rates again next month. The Bank of England raised interest rates twice since December.
In cryptocurrencies, the world’s most famous cryptocurrency bitcoin was 4% higher, trading around $44,000.
