Feb 25, 2022 01:01AM ET
By: AnalysisWatch
The dollar weakened against most currencies, including the euro, on Friday as markets reversed some of the previous day's tumultuous moves as Russia's incursion into Ukraine sent investors into a panic.
The Russian rouble also recovered somewhat to trade at around 84.4 per dollar on Friday, after hitting a record low of 89.986 per dollar the previous day as Russia launched the biggest attack on a European state since World War II.
The United States, the European Union, and several other countries responded with a wave of sanctions restricting Russia's ability to do business in major currencies, as well as sanctions on banks and state-owned companies.
Fighting continued on Friday as Russian troops advanced on Kyiv. Markets were calmer than 24 hours earlier, however, with stock markets in Asia rising after overnight gains on Wall Street.
The euro was last up 0.24% at $1.1218 after falling to a low of $1.1106 on Thursday, its lowest since May 2020.
Other currencies also recovered from their previous day's losses, with the dollar index at 96.844% down 0.2%. However, due to the magnitude of earlier moves, it is still up 0.8% for the week.
Also contributing to Friday's rally was the pound, up 0.4% to $1.343, the Australian dollar, up 0.46% to $0.7195, and the yen, up to $115.23 per dollar.
In addition to the direct impact of the war in Ukraine, currency traders sought to assess the impact of the war on monetary policy around the world.
Several European Central Bank policymakers, including some regarded as hawks, have stated that the situation in Ukraine may prompt the ECB to slow its exit from stimulus.