The euro was depressed at around 1.1345, while the US dollar and safe-haven assets actually strengthened.
The euro collapsed ahead of the close of trading last weekend due to heated NATO-Russian rhetoric related to the Ukraine crisis. EUR/USD is still under pressure at around 1.1345 in Asian trading this Monday (14/February), while the US dollar and other safe-haven assets have strengthened. The US dollar index has crept back above the 96.00 threshold.
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| EUR/USD Daily chart via TradingView |
Top US officials said over the weekend that Russia could invade Ukraine at any time and might "create an excuse" to justify the attack. On the other hand, Russia denies any such plans and accuses the West of being "hysterical".
German Chancellor Olaf Scholz warned of the threat of sanctions if Moscow did invade Ukraine. He will visit Kyiv today, then meet with President Vladimir Putin in Moscow on Tuesday to discuss de-escalation of the situation.
While the US continues to emphasize the magnitude of the danger Russia poses to Europe, the euro is increasingly under pressure in the forex market. Single Currency was also hit by fantastic US inflation data and supported the Fed's rate hike, in contrast to the more dovish attitude of European central bank bosses.
"With expectations of a Fed rate hike surging again and geopolitical tensions in Ukraine rising dramatically, the dollar index should be advancing again," said analysts at Westpac.
The escalation of market concerns about the Ukrainian crisis also had an impact on rising world crude oil prices. Brent and WTI crude oil slid back to levels of USD95.90 and USD94.50 per barrel, respectively, after previously being pressured by news of US-Iran peace talks. If war does break out, the price of this commodity nicknamed "black gold" has the potential to gain support to return to USD100 per barrel.
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