The safe-haven yen held firm early on Friday, while the euro was on track to post its second straight month of declines as tensions between Ukraine and Russia flared up again. Ukraine's president said Russian troops had entered his country in support of pro-Moscow rebels who captured a key coastal town, sharply escalating a five-month-old separatist war.
The news short circuited a corrective bounce in the euro, sending the currency hurtling back toward a near one-year low of $1.3152. It was last at $1.3182, at least 40 pips below Thursday's intraday high.
The common currency is down 1.6 percent so far in August, following last month's 2.2 percent drop. Against the Swiss franc, the euro skidded as far as 1.2049, moving ever close to the 1.20 barrier that the Swiss National Bank has vowed to protect. It last traded at 1.2063.
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