- Euro hits 22-mth low vs dollar, crosses tumble
- AUD extends rally as commodities fly
- ECB, U.S. CPI eyed later this week
The euro tumbled to a fresh 22-month low on the dollar and hit multi-year troughs on the yen, Swiss franc and sterling as war in Ukraine drove up commodity prices and stoked fears of a stagflationary shock that would hurt Europe most of all.
The common currency EUR=EBS dropped as much as 0.6% to $1.0864 in early Asia trade, its lowest since May 2020, opening the way to its 2020 trough around $1.0636.
It fell below one Swiss franc EURCHF= , hitting 0.9982, for the first time since the Swiss quit their euro peg in 2015.
Oil futures, which surged more than 20% last week, leapt 10% as the United States and Europe mull bans on Russian imports. European gas prices TRNLTTFMc1 already hit a record on Friday.
"This is very bad news for global growth – particularly Europe, given their dependence on gas from Russia," ANZ analysts said in a note.
"All up, it's another big, ugly supply shock on top of lingering COVID impacts, with serious inflationary consequences that give central banks absolutely no room to 'give growth a chance'."
Fighting intensified over the weekend and attempts at a ceasefire to allow civilians to evacuate from the besieged city of Mariupol seem to have so far failed.
Russia calls the campaign it launched on Feb. 24 a "special military operation" and says it has no plans to occupy Ukraine.
As the euro EURJPY= fell to a 15-month low of 124.78 yen and touched its lowest since mid-2016 on the pound EURGBP= at 82.23 pence, commodity currencies rose with export prices.
The Australian dollar AUD=D3 climbed 0.3% to a four-month high of $0.7390. Spot prices for Australian coal NCFMc1 are up more than 70% in about a week as buyers look for alternatives to Russian energy. Wheat Wv1 , another Australian export, is up about 50% since early February. Against the sliding euro, the Aussie is up more than 10% in about a month EURAUD= .
The New Zealand dollar NZD=D3 nudged to a seven-week top of $0.6879, though some analysts think gains could be vulnerable if the geopolitical situation deteriorates and the war expands.
Sterling GBP=D3 has been weighted by selling in the euro and fell to Friday's two-month low of $1.3201.
The U.S. dollar also rose against the yen and swiss franc, last up about 0.4% on the franc to 0.9200 CHF=EBS and about 0.3% higher on the yen JPY=EBS at 114.93.
The U.S. dollar index =USD steadied at 98.826, near Friday's 22-month top of 98.925.
U.S. inflation data and a European Central Bank (ECB) meeting later this week are the main scheduled events.
Economists think the ECB will wait until the last months of the year to raise rates, according to a Reuters poll.
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