Euro hits 7-year low against Swiss franc as Ukraine fires fire

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Euro hits 7-year low against Swiss franc as Ukraine fires fire

LONDON The euro fell to a seven-year low against the Swiss franc and hit its lowest point in almost two years against the dollar on Friday as the war in Ukraine lowered expectations of European economic growth.

The European single currency fell 2.1 per cent this week, and was expected to have its worst week since April 2020.

It was down 0.5 per cent to $1.1010 at 0850 GMT, its lowest level since May 2020, after Russian forces seized the largest nuclear power plant in Europe after a building at the complex was set ablaze during fighting with Ukrainian defenders, Ukrainian authorities said on Friday.

The fire in a building identified as a training centre had been extinguished, according to authorities. U.S. energy secretary Jennifer Granholm said there was no indication of elevated radiation levels at the plant.

Since July 2016 the euro has hit its lowest level of 82.61 pence against sterling. It touched its lowest level since January 2015 of 1.0114 against the safe-haven Swiss Franc.

The effects of surging energy and gas prices are likely to undermine European consumption and economic growth prospects, according to analysts.

Mike Kelly, head of global multi-asset at PineBridge Investments, said that the ECB is going to have no alternative but to look through this surge in inflation but the Fed is not going to delay.

Kelly said the dollar should be getting a new spring if things don't get worse.

The U.S. dollar index was up 0.36 per cent to 98.073, after touching its highest level since June 2020 against a basket of peers.

Money markets do not expect interest rate hikes at the ECB's next meeting, but the U.S. Federal ReserveFederal Reserve is certain to raise interest rates at its March 15 -- 16 meeting for the first time since the coronaviruses epidemic.

Fed Chair Jerome Powell stated that he would back an initial quarter percentage point increase in the benchmark rate.

Russian forces were attacking and surrounding cities in Ukraine.

The Australian dollar went up 0.6 per cent to a four month high of $0.7370 against the U.S. dollar, helped by the commodities boom.

High energy prices have prevented the Japanese yen from benefiting from the safe haven flows, as Japan is a net importer of energy.

When news of the fire came to an end, the yen briefly climbed on the dollar, but later gave up those gains and was little changed at 115.37 per dollar.