Euro slips to month-low as new sanctions on Russia loom

The euro fell on Wednesday to its lowest level in one month against a strengthening dollar as the prospect of new Western sanctions on Russia added pressure to the European currency.

The euro was 0.15% lower versus the dollar at $1.08900 at 0800 GMT, after briefly touching a nearly one-month low of $1.08735.

The United States and its allies prepared new sanctions on Moscow over civilian killings which President Volodymyr Zelenskiy described as "war crimes", as heavy fighting and Russian airstrikes pounded the besieged port of Mariupol.

"A new round of sanctions against Russia are expected to be announced today by the US and the EU, with any implications for energy exports likely to keep the euro under pressure," ING FX strategists Francesco Pesole and Chris Turner told clients.

French eurosceptic, far-right candidate Marine Le Pen closing in on President Macron in the polls ahead of this month's presidential elections "adds another threat to the euro", the ING strategists added. The dollar index, which measures the greenback against six peers, rose 0.12% to 99.600, after touching its highest since May 2020 of 99.759.

The index had gained 0.5% on Tuesday after Fed Governor Lael Brainard, typically seen as a more dovish policymaker, said she expected a combination of interest rate increases and a rapid balance sheet runoff to bring US monetary policy to a "more neutral position" later this year, with further tightening to follow as needed

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