Euro falls on Ukraine crisis fears

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IOL world currency1 Graphic: Renjith Krishnan.

New York - The euro fell on Monday as the escalating Ukraine crisis sent investors fleeing to the dollar and the yen.

“Currencies, equities and Treasuries were all affected by the escalating tensions between Russia and Ukraine. Some markets were hit harder than others and the magnitude of the impact reflects each country's vulnerability to the crisis,” said Kathy Lien of BK Asset Management.

The euro slid to $1.3737 around 01:00 SA time, down from $1.3800 late Friday.

The euro fell to 139.34 yen from 140.44 yen, while the dollar also dropped against the Japanese currency, to 101.44 yen from 101.76.

Since Russian President Vladimir Putin won the Russian parliament's blessing Saturday to use force in Ukraine, including in Crimea - a strategic Black Sea peninsula with a majority ethnic Russian population - outraged Western powers have threatened to expel Russia from the Group of Eight leading industrial countries.

The euro fell because Europe is more reliant economically on Russia than the United States, Lien said.

“It is no secret that the Ukraine is just as important to Europe as it is to Russia and Russia is an important energy partner for the region,” Lien said.

She noted Russia supplies large amounts of oil and gas to Europe via pipelines running through Ukraine. If the conflict leads to supply disruptions, fuel prices would rise significantly.

The dollar rose to 0.8830 Swiss franc from 0.8797 franc late Friday.

The pound fell to $1.6666 from $1.6737. - Sapa-AFP



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