Rouble slips again, Swiss franc hits seven-year high

London

THE rouble fell further on Tuesday (Mar 1) after partly recovering some ground, while the US dollar edged higher and the Swiss franc hit a seven-year high, as investors sought out the safe-haven currency while waiting for developments in Ukraine.

Financial markets have been rocked in recent days by Russia's invasion of Ukraine, the biggest assault on a European state since World War Two, and the resulting Western sanctions which include cutting off some Russian banks from the SWIFT financial network and limiting Moscow's ability to deploy its US$630 billion of foreign reserves.

Global stock markets initially showed signs of regaining their composure on Tuesday, but by 1152 GMT, European indexes and Wall Street futures were firmly in the red.

The rouble was down around 4 per on the day, trading at 97.036 per UA dollar, a day after it collapsed to a record low of 120 per dollar. Earlier on Tuesday, it had recovered some of those heavy losses, helped by an emergency rate hike by Russia's central bank.

Still, the rouble was down almost 30 per cent from its best levels this year.

The US dollar, which surged last week on safe-haven flows, continued to climb, leaving the US dollar index up 0.2 per cent at 96.96 .

The euro was down 0.4 per cent on the day at US$1.1175.

Neil Jones, head of FX sales at Mizuho, said that investors were watching the rouble and using that to determine the direction of other currencies.

"Rouble is the barometer which the rest of the foreign exchange market follows right now," Jones said.

The safe-haven yen was around 0.2 per cent stronger against the US dollar, at 114.790.

Meanwhile, the Swiss franc hit its strongest level since 2015 against the euro, with the pair last at 1.0248 .

Mizuho's Jones said some investors were disappointed that the yen had been underperforming the Swiss franc as a safe-haven currency, and suggested one reason may be that Japan has higher energy demands - and buying energy involves selling the yen to buy dollars, which puts depreciation pressure on its currency. REUTERS