The euro fell to its lowest level in a month as the West prepared for new sanctions against Russia

By Joyce Alves

LONDON (Reuters) – The euro fell to a one-month low on Wednesday against a stronger dollar as the prospect of fresh Western sanctions against Russia added pressure on the European currency.

The euro was down 0.15% against the dollar at $1.08900 at 0800 GMT, after briefly touching a one-month low of $1.08,735.

The United States and its allies have prepared new sanctions on Moscow over the killings of civilians that President Volodymyr Zelensky called “war crimes,” as intense battles and Russian air strikes pounded the besieged port of Mariupol.

“A new round of sanctions against Russia is expected to be announced today by the United States and the European Union, with any impacts on energy exports likely to keep the euro under pressure,” Francesco Pesol and Chris Turner, strategists at ING FX, told clients.

ING strategists added that French far-right Eurosceptic candidate Marine Le Pen vying for President Macron in opinion polls ahead of this month’s presidential election “adds another threat to the euro”.

The dollar index, which measures the greenback against six peers, rose 0.12% to 99.600, after touching its highest level since May 2020 at 99.759.

The index rose 0.5% on Tuesday after Federal Reserve Governor Lyle Brainard, usually seen as a more pessimistic policymaker, said she expects a combination of interest rate increases and a rapid run-down in the balance sheet to bring US monetary policy to a “more neutral stance.” ” Later. This year, with more emphasis to follow as needed.

The two-year yield in the US was at its highest since January 2019, the highest five-year yield since December 2018, and the benchmark 10-year yield rose to the highest since March 2019. [US/]

Later in the day, the Federal Reserve will release the minutes of its March meeting which is expected to provide new details about its plans to reduce its bond holdings.

“What matters now is what the Fed does in May… and what signals is it sending in terms of interest rates this year – several hikes of more than 25 basis points (bps)?” said Antje Praefcke, FX analyst at Commerzbank.

She added that since the market has already identified a hike in interest rates, confirmation of these expectations is likely to have a “marginal positive impact on the dollar.”

Sterling was flat against the dollar at $1.30690, after touching a three-week low against the dollar. [GBP/]

Bitcoin was 0.4% softer at $45305.

(From Joyce Alves, Additional reporting by Elon John, Editing by Kim Coogle)

(The title and image for this report may have been reformulated only by the Business Standard staff; the rest of the content is automatically generated from a shared feed.)

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