Dollar steadies vs euro in wake of Ukraine plane crash

July 19, 2014 | 09:59

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The dollar steadied against the euro in cautious trade a day after a Malaysian passenger plane was shot down over Ukraine and Israel launched a Gaza ground assault.

Euro and US dollar notes. (AFP/Bertrand Langlois)

NEW YORK: The dollar steadied against the euro on Friday in cautious trade a day after a Malaysian passenger plane was shot down over Ukraine and Israel launched a Gaza ground assault.

Currencies stabilized and Wall Street stocks rebounded from Thursday's drubbing amid the heightened geopolitical tensions.

The United States has said evidence suggests that pro-Moscow separatists, possibly with Russian technical assistance, downed the Malaysia Airlines plane with a surface-to-air missile, killing all 298 people on board.

Ukraine's government and Western leaders have accused Russia of supporting the separatist rebellion in the country's east, but Moscow has denied the allegations.

"The growing possibility that the crash was not caused by a mechanical accident should have triggered additional risk aversion but instead of fear, it created relief in the markets," said Kathy Lien of BK Asset Management in a market note.

Investors are also keeping a wary eye on events in the Gaza Strip after Israel sent in troops Thursday in a ground offensive aimed at smashing Hamas's network of cross-border tunnels.

"Caution is warranted but for the most part, investors have priced in Russia/Ukraine/Israel/Gaza risk," Lien said.

AFP

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