WELLINGTON, March 3 The yen rallied to a
three-week high against the U.S. dollar on Monday while the
Australian and New Zealand dollars stumbled as escalating
political tensions in Ukraine prompted investors to dump
higher-risk currencies in favour of lower-risk, liquid ones.
Ukraine mobilised for war on Sunday while the United States
and European countries condemned steps taken by Russia to use
military force in its politically vulnerable neighbour in what
could become Moscow's biggest confrontation with the West since
the Cold War.
"It's a reaction to the escalation in tension in Ukraine
over the weekend ... the traditional risk proxies are getting
hit, and the safe havens getting bid," said ANZ currency
strategist Sam Tuck in Auckland.
Growing geopolitical risks pushed the U.S. dollar
down to around 101.30 yen in early Australasian trade, its
weakest since early February and down from around 101.80 late on
Friday. The low-yielding yen tends to appreciate during periods
of global uncertainty.
The euro skidded to a near 14-month low around
1.2095 Swiss francs. The franc, which is widely
considered the safest of the G10 currencies, traded at 0.8795
per U.S. dollar, holding near 0.8775 francs hit late last week,
its strongest since late 2011.
The euro slipped to around $1.3755 from around
$1.3800 late on Friday, and analysts said the euro could come
under more selling pressure on risks that tensions between
Russia and European countries could disrupt gas supplies from
Russia to Europe via Ukraine.
"Monday should bring a lower bund yield and EUR/USD at least
to discount the ordinary risk scenario of another supply
interruption," JPMorgan analysts said in a note.
Investors dumped the higher yielding Antipodean currencies,
pushing the Aussie to a three-week low of $0.8891,
retreating from $0.8990 hit on Friday, while it stumbled to
around 90.10 yen, also its weakest since early February.
The kiwi fell to $0.8348, knocked off a high of
$0.8428 hit late last week. Against the yen, the kiwi
slipped to around 84.65 yen.
Analysts said the relatively illiquid Aussie and kiwi, which
tend to sell off during periods of risk aversion, could fall
further against the yen if the situation in Ukraine deteriorates