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Market Pulse: Euro weakest vs. U.S. dollar since May 2020 as Russia attack on Ukraine sparks eurozone economy fears

the close up of the five rows coins ,and the coins jar that fell, with the back ground is a dark blue graph.

The euro fell sharply versus major rivals on Tuesday, plumbing its lowest level versus the U.S. dollar since May 2020 with the eurozone economy seen bearing the brunt of the developed-market economic impact of Russia’s invasion of Ukraine.

The shared currency was down 1% versus the U.S. dollar

at $1.1107 after trading as low as $1.1090, according to FactSet. It fell 1.2% versus the Japanese currency
to trade at 127.51 yen, its lowest since December.

“Many analysts [are] expecting a move below $1.1000 [for euro/U.S. dollar] with some calling for parity now on the back of Russian aggression. We may still get that if the situation deteriorates, which it definitely could, but if we get to a place of resolution we might have a big rip in EUR/USD instead,” said Brad Bechtel, global head of FX strategy at Jefferies, in a note.

“I would not be long EUR/USD here, not yet, until we get more clarity on where things are going,” Bechtel wrote.

The U.S., the European Union, U.K. and Canada over the weekend put additional sanctions on Moscow in response to its invasion last week of Ukraine. In addition, Russia’s central bank was also targeted in an effort to impede its access to its foreign exchange reserves.

The Russian ruble subsequently tanked in volatile trade, hitting all-time lows versus the dollar
Meanwhile, banks in France, Italy and Austria were seen carrying the most financial exposure to Russia, while U.S. bank exposure was limited, according to economists at Wells Fargo, who cited Bank for International Settlements data.

Read more: Sanctions take aim at Russia’s economy: Here’s who is most exposed

The ICE U.S. Dollar Index
a measure of the U.S. unit against a basket of six major rivals, with the heaviest weighting belonging to the euro, was up 0.8% at 97.474, not far off its intraday high of 97.74 seen on Feb. 24, which marked its highest since June 2020, according to FactSet.

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