LONDON, April 4 (Reuters) - The euro fell on Monday as Western powers said new sanctions were needed against Russia following civilian killings in Ukraine that appeared to amount to war crimes.
The euro, which has been under pressure due to worries about the economic damage from the war in Ukraine, slipped 0.4% versus the dollar to park to $1.1005 at 1120 GMT. Against sterling, it fell to a six-day low and it was last down 0.3% at 84.01 pence.
French President Emmanuel Macron called for new sanctions and said there were clear indications Russian forces had committed war crimes in the town of Bucha.
The Kremlin denied any accusations related to the murder of civilians in the town.
German Defence Minister Christine Lambrecht said the European Union should discuss ending Russian gas imports. Russia supplies some 40% of Europe's gas needs.
"More sanctions of course also mean that the risk of energy disruptions in Europe rises, because of our own sanctions or because Russia might get completely serious with its counter-sanctions rather than just changing the payment mode for natural gas," said Ulrich Leuchtmann, Commerzbank Head of FX.
"In my view the risk of significant euro weakness increases."
The U.S. dollar index , which measures the greenback against a basket of peers including the euro, found support on rising Treasury yields amid expectations of rapid-fire U.S. interest rate hikes. It rose 0.23% to 98.845.
Data on Friday showed U.S. unemployment hitting a two-year low of 3.6% last month, leading investors to assess if the numbers would strengthen the Federal Reserve's resolve to tackle inflation by lifting rates sharply.
Kit Juckes, head of FX strategy at Societe Generale, said a 50bp rate hike was already priced in.
"CFTC data suggest the market has been rebuilding its long dollar position. That's one reason the dollar is making heavy work of rising any further just now," he said.
Speculators' net long bets on the dollar rose to an 11-week high in the latest week.
Fed funds futures have priced a near 4/5 chance of a 50 basis point hike next month, while two-year U.S. yields climbed to their highest level since March 2019.
Markets in mainland China were closed for a public holiday, but in offshore trade the yuan was kept under pressure by concerns over a lengthening lockdown in Shanghai, where authorities are seeking to virus-test all 26 million residents.
Reporting by Joice Alves, editing by Ed Osmond and John Stonestreet
Source: Reuters