As the United States of America, along with Europe and its allies, plans to ban the import of crude oil from Russia, investors have begun to weigh its impact on the global economy. As it turns out, the US Dollar has gained its value in the global market, whereas Euro has lost its charm.
According to estimates, the Euro may face more severe consequences as it is more heavily dependent on Russia for the import of crude oil. The price of oil is already at its 14-year high, with the future remaining uncertain about how much more it will increase.
The Conflict Continues To Affect Foreign Exchange
Crude oil has hit a 14-year high in terms of its value. Since the United States of America and Europe, along with its allies, are planning to go a step ahead and ban the import, there is constantly rising uncertainty about how the prices will rise.
The US Dollar has risen in terms of its value after being lifted by Safe-Haven Flows. FX online brokers have their eyes on other currencies in the market as the Russia-Ukraine conflict heightens.
A rise of 0.33% was registered by the Dollar index to touch the mark of 99.24; however, Euro went down to $1.08575 by 0.7% against the US Dollar.
The US Dollar Index measures the value of the greenback in comparison to six global peers. Check out the best US forex brokers platform that support the dollar.
The Euro is reportedly down amid the rising concerns over energy prices. They are expected to cause stagflation and beat the economy of Europe. The region is attempting to recover from the Covid-19 pandemic, but it seems that the Russia-Ukraine conflict could slow it down for a little while.
Edward Moya, a Senior Analyst at Oanda, noted that the Russian-Ukraine conflict was indeed hurting the growth prospects of the European region as the conflict was leading to surges across several commodities in addition to Crude Oil.
According to Edward Moya, the US Dollar will receive support in the short term, and the country’s economy was still well-positioned due to the fact that it was not as dependent on Russian supplies as Europe was.
Another factor that is causing worry is that the volatility of the Euro/Dollar has reached its highest value since March 2020.
Joe Manimbo, a Senior Market Analyst at Western Union Business Solutions, presented statistics. He said that the Euro had lost 3% in the last three days, and it stood at $1.08 as of Monday.
He also said that the market might be more careful in pushing it further down ahead of the European Central Bank’s meeting that is scheduled in the middle of this week.
Other currencies that registered a downfall trend were the British Pound and the Australian Dollar, with the fall of 0.91% and 0.56%, respectively.