The US dollar fell on Tuesday, while the euro traded slightly above a 22-month low in the previous session as the war in Ukraine jeopardized growth prospects in Europe.

At 2:55 AM ET (0755 GMT), the U.S. dollar index, which tracks the dollar against a basket of six other currencies, was trading slightly lower at 99.275, maintaining its strength as a safe haven in the Russian-Ukrainian conflict.

EUR/USD rose 0.1% to 1.0863 in an attempt to recover from nearly a week of selling, but remains near Monday’s low at 1.0806, suggesting any support is rather half-hearted. The euro has fallen 4% against the dollar since Russia launched its invasion of Ukraine.

“How low can EUR/USD fall? Support levels seem to be in the 1.0760/70 area and then March 2020 lows at 1.0640, but it’s likely that big numbers like 1.0500 become more relevant at such times.” ING analysts in a note.
And it’s not just the dollar, against which the single currency sold strongly, as it briefly traded at parity with the Swiss franc on Monday for the first time in seven years.

This prompted the Swiss National Bank to declare its readiness to intervene and solve the problem of the rapidly strengthening franc.

The European Central Bank (ECB) meets on Thursday, but the single currency is unlikely to receive support then, as the possibility of slower growth in the region due to the conflict in Ukraine and rising commodity prices could prompt policymakers to delay rate hikes until the end. of the year.

The ECB is also unlikely to intervene on its own to support the euro.
“If the situation gets out of hand, we believe that a coordinated G5 intervention to support the EUR/USD will be more likely than an intervention at the ECB’s own expense,” ING added. “But that may not happen until parity is reached.”
The Federal Reserve will meet next week, and Chairman Jerome Powell backed a quarter-point rate hike last week, telling Congress it would act more aggressively later if inflation didn’t come down.

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Elsewhere, USD/JPY rose 0.1% to 115.43, GBP/USD gained 0.1% to hit 1.3108, a nearly 16-month low, while AUD/USD lost 0.4% to 0.7285, losing some of its recent gains.
USD/RUB fell 4.1% to 130.00, with the ruble benefiting from a lack of solidity between Western governments over a ban on oil imports from Russia.

USD/PLN rose 0.1% to 4.5865 ahead of the latest meeting of the Central Bank of Poland, which is expected to raise interest rates by 50 basis points to 3.25%.
The move will help support the zloty, which has fallen to a record low against the euro, as the fallout from Russia’s war with Ukraine spreads.

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