Rouble set to dive, euro slides after West steps up Russia sanctions By Reuters


© Reuters. FILE PHOTO: Euro currency bills are pictured at the Croatian National Bank in Zagreb, Croatia, May 21, 2019. REUTERS/Antonio Bronic


By Kevin Buckland

TOKYO (Reuters) – The Russian rouble was set to plunge nearly 30% to all-time lows versus the dollar on Monday, while the euro sank after Western nations announced fresh sanctions to punish Russia for its invasion of Ukraine, including blocking some banks from the SWIFT international payments system.

Safe haven currencies including the U.S. dollar and yen were in demand after Russian President Vladimir Putin put nuclear-armed forces on high alert on Sunday, the fourth day of the biggest assault on a European state since World War Two.

The rouble was indicated as low as 119 per dollar, a more than 29% tumble.

The euro declined 0.83% to $1.1181, after earlier falling as much as 1.34%. The single currency lost 0.72% to 129.32 yen, and was 0.67% lower at 1.03655 Swiss franc.

“The escalating crisis in Ukraine will force markets to price in a substantially higher geopolitical risk premium, (and) that is going to leave safe havens like the USD bid,” Westpac strategists wrote in a client note.

“The Ukrainian situation is volatile, and so too is market sentiment, although a risk-averse backdrop near term appears the most prudent assumption,” meaning more downside for Australian and New Zealand dollars, they said.

The slid 0.76% to $0.71795, while New Zealand’s sank 0.82% to $0.6689.

Sterling slipped 0.29% to $1.3368.

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