Euro rises as Ukraine talks get underway, yen sees modest recovery According to Reuters

By Stefano Rebaudo

(Reuters) – The euro rallied on Tuesday as Ukrainian and Russian negotiators met in Turkey for the first face-to-face talks in more than two weeks.

The US dollar was lower but still not far from a near two-year high, while the yen edged up slightly after falling on Monday to its lowest level since August 2015.

Any progress towards a potential ceasefire or peace in Ukraine would support the common currency as the euro zone is seen as having suffered the most significant economic impact of the conflict, starting with the Russian invasion on 24 February.

Ukrainian and Russian negotiators met in Turkey on Tuesday, with Ukraine seeking a ceasefire that would not affect territory or sovereignty as their forces pushed the Russians away from Kyiv.

Against a basket of currencies, the dollar was down 0.3% at 98.767, but not far from its highest since May 2020 of 99.415.

“Our view on the greenback remains positive due to the hawkish stance of the Federal Reserve. We think the greenback could soon break through the 100 mark,” said Roberto Mialich, FX strategist at Unicredit (MI:) said.

The euro was up 0.5% at $1.1033.

You-Na Park-Heger, forex analyst at Commerzbank (DE:), said in a research note to clients.

The greenback fell 0.3% to 123.5 against the yen after rising to its highest level since 2015 on Monday, while it is set for its biggest monthly gain since November 2016 .

The chart below shows the monthly percentage change of the dollar/yen exchange rate.

DIFFERENT MONEY POLICY

Japanese Finance Minister Shunichi Suzuki said the government would closely monitor monetary moves to prevent a “bad” yen from damaging the economy.

Lee Hardman, currency and emerging markets analyst at MUFG, said: “While comments from Japanese officials are unlikely to reverse the yen’s weakening trend overnight, they do little. They should at least help slow the recent rapid pace of yen selling,” said Lee Hardman, currency and emerging markets analyst at MUFG. Note to customers.

The Bank of Japan on Tuesday continued its relentless push to protect its key yield cap by offering to buy an unlimited number of 10-year government bonds, putting more downward pressure on prices. for the yen.

“The US and Japanese monetary policy divergence will continue to weigh on the yen, which we expect to stabilize at around 125 against the dollar and possibly even break through there.” “, argues Mialich of Unicredit.

The Swedish crown has risen recently as the spread between the German and Swedish 10-year yields widened to 62 bps from 36 bps in mid-March.

Of China little changed against the greenback at 6.3831 following new pandemic restrictions in Shanghai. It hit its lowest level since October 2021 at 6,4106 in mid-March.=>

Shanghai, China’s most populous city, tightened the first phase of a two-stage COVID-19 lockdown, requiring people to stay indoors.

fell 0.5% at $47,722 after hitting its highest level since early January on Monday.

Ether, the world’s second-largest cryptocurrency, is up 3.3% at $3,443.