The euro weakened and safe-haven currencies including the US dollar were in demand on Thursday amid growing fears of a full-scale Russian invasion of Ukraine. The greenback, yen, and Swiss franc all climbed back towards multi-week highs for the single European currency.

Meanwhile, the greenback hovered near one-week peaks versus major currencies after US Secretary of State Antony Blinken said he believed Russia would strike Ukraine within hours.

Riskier commodity-linked currencies also fell, succumbing to a deteriorating risk sentiment after the start of the week proved resilient on high commodity prices.

Ukraine has declared a state of emergency and Moscow has begun evacuating its embassy in Kyiv, while the West has imposed sanctions on Russia. The euro fell as much as 0.26% to $1.12750, its lowest level since Feb. 3.

It fell 0.29% to 129.640 yen, near Tuesday's low of 129.360, its weakest since Feb. 3. It slipped 0.22% to 1.03550 francs, closing at Tuesday's trough at 1.03405, which was its lowest since Jan 24.

Euro Fails to Go Higher Again

The America greenback index - that measures the currency against a basket of six major currencies, as well as the monetary unit, yen, and Swiss franc - rose the maximum amount as 0.19% to 96.372 for the primary time since Saint Valentine's Day.

Seeing a knee-jerk reaction to Blinken's comments, with haven currencies in demand and euros and commodity currencies selling, said Joseph Capurso, strategist at Commonwealth Bank of Australia.

The Australian dollar was down 0.33% to $0.72075, and the New Zealand dollar was down 0.41% to $0.67475. The British pound had lost 0.08% to $1.35340.

The euro's strength failed, and the dollar received a safe-haven boost on Monday after the Kremlin said there were no concrete plans for a summit on Ukraine between the Russian and US presidents.

Reports over the weekend that Vladimir Putin and Joe Biden had united in theory to debate the chance of finding some way out of Europe's biggest military crisis in decades have prompted investors to cautiously obtain stocks and the monetary unit and pull capital faraway from safe-haven.

But the most recent news, together with reports of border clashes, prompted investors to require cowl. “Tensions area unit running high,” aforesaid Kenneth Broux, FX contriver at Societe Generale (OTC: SCGLY).

Safe-Haven Currencies Benefit from Ukraine Tensions

Against the safe-haven franc, the monetary unit slouched 0.5 a % to a 3-week low of 1.0384 francs per monetary unit. Against the greenback, the euro, which was up 0.6% at one stage during early London trade, was slowly shedding those gains and was up slightly.

Russia's FSB security service said a shell fired from Ukrainian territory had destroyed a border guard post. Ukrainian authorities warned that hackers were making ready to launch a serious attack on government establishments, banks, and therefore the defense sector on Tues.

“Optimism has disappeared,” said Jeremy Stretch, head of G10 FX strategy at CIBC, pointing to fresh headlines showing that the UK believes Russia may still be plotting an invasion.

Attention is Tuesday's order, he said. During the same time, the dollar index recovered most of its losses and was down just 0.13% against major rivals.

Echoing mood swings over the prospect of reduction, European stock markets turned sharply negative once gap in positive territory, with a gauge of European securities market volatility at their highest level since Nov 2020.

In distinction, safe-have currencies that have benefited from tensions driven by Russia's military build-up on Ukraine's borders square measure back in favor. Country monetary unit was up 0.54% at $0.9164 versus the broadly speaking firm United States greenback.

While the result of negotiations to seek out a peaceful reply of the Ukraine crisis remains unsure, additional volatility is predicted within the future. A measure of currency market volatility held near the highest level since February 2021.