The dollar was down on Wednesday morning in Asia, but the moves were small. Investors flocking to safe-haven assets as Russia’ invasion into Ukraine intensified.
The US Dollar Index that tracks the greenback against a basket of other currencies inched down 0.01% to 97.382 by 9:58 PM ET (2:58 AM GMT).
The USD/JPY pair inched up 0.09% to 115.00.
The AUD/USD pair was up 0.45% to 0.7280, while the NZD/USD pair was up 0.37% to 0.6781.
The USD/CNY pair stabilized at 6.3125, while the GBP/USD pair inched up 0.05% to 1.3327.
The euro was last down 0.8% on the day after diving to its lowest since June 2020. The Russian rouble was down as the invasion of Ukraine intensified.
Morgan Stanley analysts said in a note that they were closing trade recommendations for long euro against the U.S. dollar, yen, pound and the Brazilian real and were “neutral on the euro overall.”
“Investors who have assets in Russia that will be increasingly challenging to divest thanks to growing capital controls and sanctions may look at hedging options. Currencies that have a high correlation with RUB risk may be seen as such an option, such as currencies in the CEE area and potentially the EUR,” the note said.
“We will potentially look to re-enter these positions and re-affirm our EUR-bullish thesis in the future should conditions warrant, but, for now, we think it best to keep risk limited and preserve capital for when clearer themes emerge,” the note added.
Investors were looking at the latest Ukraine developments. Russia warned Kyiv residents to flee their homes, and Russian commanders have intensified the bombardment of Ukrainian cities.
Russia’s invasion of Ukraine is the biggest assault on a European state since World War Two. The West slapped sanctions and cut some Russian banks from the global SWIFT network. The U.S. is expected to ban Russian aircraft from American airspace, following similar moves by Europe and Canada.
Brent oil futures had their highest close since August 2014 over energy shortage concerns. The coordinated release of crude stocks by the U.S. and allies to minimize supply disruption failed to ease worries as Russia is one of the world’s top oil exporters.
“The likelihood of a ’70s-style global oil shock is growing, and investors are moving to safe havens as fast as they can,” Cambridge Global Payments chief market strategist Karl Schamotta told Reuters.
“The euro is on the front lines here, most exposed to energy shock,” with the euro falling as oil and gas prices jump, he added.
In cryptocurrencies, Bitcoin was up about 2.3%.