Euro jumps after Ukraine offers neutral status, yen rebounds

The euro jumped on Tuesday after some progress was reported in peace talks between Russia and Ukraine.

Russia promised at the talks in Istanbul to drastically scale down its military operations around Kyiv and the northern Ukrainian city of Chernihiv, while Ukraine proposed neutral status with international guarantees.

The U.S. dollar was lower, while the yen staged a modest rebound after tumbling on Monday to its lowest level since August 2015.

Any step toward a ceasefire or potential peace deal in Ukraine would support the common currency as the euro area is seen suffering a significant economic blow from the conflict, which began with Russia’s invasion on Feb. 24.

The euro was up 1.3% at $1.1125, at its highest since March 18.

“Unless there is positive news from the negotiations between Ukraine and Russia, EUR will continue to struggle climbing back above the 1.10-mark against USD on a sustainable basis,” You-Na Park-Heger, foreign exchange analyst at Commerzbank, said in a research note to clients.

Versus a basket of currencies, the dollar was down 0.6% at 98.470, but not far from its highest level since May 2020 at 99.415.

via Reuters