The Russian rouble fell to a record low on the last day of February, and the U.S. dollar jumped against most peers. The greenback rose after Western nations announced fresh sanctions to punish Russia for its invasion of Ukraine, and Russia’s longtime leader Vladimir Putin put its nuclear forces on high alert.
In early trading, the rouble declined to as low as 119 per dollar, tumbling beyond its previous low of 90 roubles per dollar. The Russian currency was last at 109.
The declines came in spite of Russia’s central bank announcing a number of steps on Sunday to support domestic markets. Western countries continue to take measures against Russia. They blocked certain Russian banks from the SWIFT international payments system. Importantly, restrictive measures on the country’s central bank were also imposed to prevent it from deploying its international reserves to undermine sanctions.
The euro dropped 1.1% against the U.S. dollar to $1.1148. The single currency was also down 1% on both the yen and the Swiss franc.
Undoubtedly, the U.S. currency was the main beneficiary of the tension around Ukraine. The dollar index, which tracks the U.S. currency against a basket of currencies, rose 0.83% to 97.368.
The U.S. currency even gained a fraction on the yen, which was at 115.53 per dollar.
At the moment, markets are pricing in a 95% chance the Federal Reserve will hike rates by 25 basis points at its March meeting.
Furthermore, investors believe the war will deter the European Central Bank from any strong tightening moves in the near term.
The Australian dollar dropped 0.72% to $0.7180, and the New Zealand dollar fell 0.76% to $0.6685.
The British pound was slightly weaker at $1.335.
The world’s largest cryptocurrency bitcoin was in the middle of its recent range in cryptocurrency markets, trading just below $38,000.
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