European currencies sink after Russia invades Ukraine By Reuters

By Tommy Wilkes

LONDON, Feb 24 (Reuters) – The Russian ruble fell to a record low and European currencies, including the euro, were hit the hardest in a selloff on Thursday after Russia launched an invasion of Ukraine, triggering dramatic movements in the currency markets.

* Investors looked to safe-haven currencies such as the dollar, which was up 0.9%, as well as the Swiss franc and Japanese yen.

* Next to the ruble, currencies of European countries such as the Swedish krona, Hungarian forint and Polish zloty posted the biggest losses, down more than 1%, as traders braced for the aftermath of war in Eastern Europe and new Western sanctions on Russian assets.

* Volatility in currency markets soared, with one of the most followed measures hitting its highest since December 2020.

* MUFG analyst Lee Hardman said risk aversion “will dominate in the short term, favoring further strength in the dollar, yen and Swiss franc… Conversely, risks remain heavily skewed to the downside.” low for the ruble and other European currencies that are more sensitive to the negative effects of military action in Ukraine.

* The ruble weakened to 89.98 per dollar before recovering some of those losses. The US currency was up almost 4% against the Russian currency.

* The euro fell as much as 1.2% to $1.1164, its lowest level since January 31.

* The hit 97.04, a three-week high.

* John Goldie, a currency trader at Argentex, said he had been surprised by the lack of reaction in currency markets in recent days. “It is clear that many did not hear the words of Putin’s speech the other day and dismissed it as the ramblings of an egoist. That short-sighted thinking has now given way to real concern about how far this goes,” he said.

* The movements of the Japanese yen were not so dramatic. The dollar was down 0.3% at 114.71 yen.

(Additional reporting by Elizabeth Howcroft; Editing in Spanish by Ricardo Figueroa)