Rouble dives to new record low, euro slides after West steps up Russia sanctions
Safe-haven currencies, including the US dollar and yen were in demand after Vladimir Putin put nuclear-armed forces on high alert on Sunday
TOKYO - The rouble plunged nearly 30% to an all-time low versus the dollar on Monday, while the euro sank after Western nations announced fresh sanctions to punish Russia for its invasion of Ukraine, including blocking some banks from the SWIFT international payments system.
Safe-haven currencies including the U.S. dollar and yen were in demand after Russian President Vladimir Putin put nuclear-armed forces on high alert on Sunday, the fourth day of the biggest assault on a European state since World War Two.
The rouble dropped to as low as 119 per dollar RUB=EBS, and was last down 28.77% at 118.
The vendor of a newspaper and magazine stall demonstrates rouble banknotes in Stavropol, southern Russia, January 21, 2016. (REUTERS/Eduard Korniyenko/File Photo / Reuters Photos)
The euro EUR=EBS declined 0.76% to $1.11855, after earlier falling as much as 1.34%. The single currency lost 0.73% to 129.265 yen EURJPY=EBS, and was 0.60% lower at 1.03665 Swiss franc EURCHF=EBS.
"The escalating crisis in Ukraine will force markets to price in a substantially higher geopolitical risk premium, (and) that is going to leave safe havens like the USD bid," Westpac strategists wrote in a client note.
"The Ukrainian situation is volatile, and so too is market sentiment, although a risk-averse backdrop near term appears the most prudent assumption," meaning more downside for Australian and New Zealand dollars, they said.
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The Aussie slid 0.75% to $0.7183 AUD=D3, while New Zealand's kiwi sank 0.79% to $0.66915 NZD=D3.
Sterling GBP=D3 was off 0.29% at $1.33695.