Yen firm, euro falters as Ukraine crisis deepens

The safe-haven yen hit a near three-week high and the euro touched a one-week low in Asia trade on Tuesday as Russia ordered troops into breakaway parts of eastern Ukraine and the West vowed sanctions in response.

The yen edged about 0.2% higher to 114.50 to the dollar in early trade, before retreating slightly, while the euro dipped about 0.1% to $1.1297. The Swiss franc, another safe-haven, hit a one-month high on Monday.

Trade in other currencies steadied as investors await further developments in the crisis – with the Russian rouble climbing back above 80-to-the-dollar and the risk-sensitive Antipodean currencies holding firm.

“It is remarkably restrained…but in these circumstances risk metrics are the driving force,” said NAB head of foreign exchange strategy, Ray Attrill.

Russian President Vladimir Putin has ordered the deployment of troops to two breakaway regions in eastern Ukraine after recognising them as independent.

A senior U.S. official said the move did not yet constitute a “further invasion” that would trigger the harshest sanctions, but that a wider campaign could come at any time.

Britain, France and Germany agreed to respond to Russia’s recognition of the breakaway regions with sanctions, and the White House said it would announce further measures.

“Russia hasn’t invaded…(but) we still need to watch developments in the crisis,” said Scotiabank strategist Qi Gao.

A planned meeting between Russian Foreign Minister Sergei Lavrov and U.S. Secretary of State Antony Blinken on Thursday is now in focus ahead of a possible U.S.-Russia leaders summit on Friday.

The Russian rouble tanked more than 3% against the dollar on Monday and extended its slide on Tuesday, before steadying at 79.147 per dollar. Ukraine’s currency fell more than 1% on Monday.

The risk-sensitive Australian and New Zealand dollars firmed slightly, but kept within recent ranges as analysts said commodity prices and a market already positioned heavily short Aussie dollars limited sentiment-driven selling.

The Australian dollar was last up about 0.2% at $0.7205. [AUD/]

“The sharp sell-off in Russian assets is a stark reminder that tension remains super high and risk sentiment is being hit across equity, credit and bond markets,” Westpac analysts said in a note.

“However, the commodity story remains super supportive though and we are in the middle of miner dividend season meaning that we are likely set for more rangy price action around $0.72.”

The kiwi last up 0.2% at $0.6714 and sterling was down about 0.1% to $1.3593. [GBP/]

The U.S. dollar index held at 96.147.

Cryptocurrencies were under pressure, with bitcoin dropping to an almost three-week low of $36,370.

Currency bid prices at 0527 GMT

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar

$1.1306 $1.1311 -0.04% -0.54% +1.1320 +1.1288

Dollar/Yen

114.7050 114.8200 -0.09% -0.26% +114.7900 +114.5500

Euro/Yen

129.69 129.76 -0.05% -0.48% +129.9000 +129.3700

Dollar/Swiss

0.9160 0.9157 +0.03% +0.42% +0.9169 +0.9157

Sterling/Dollar

1.3596 1.3603 -0.09% +0.49% +1.3599 +1.3582

Dollar/Canadian

1.2749 1.2750 +0.04% +0.88% +1.2769 +1.2748

Aussie/Dollar

0.7209 0.7189 +0.29% -0.83% +0.7212 +0.7172

NZ

Dollar/Dollar 0.6717 0.6701 +0.22% -1.89% +0.6718 +0.6681

All spots

Tokyo spots

Europe spots

Volatilities

Tokyo Forex market info from BOJ