LONDON—The euro plunged to its weakest since May 2020 on Wednesday as investors worried about the impact of an escalating conflict in Ukraine on the region’s economic prospects, while demand for dollars rose as nervous traders looked for safety. The common currency fell half a percent to as low as $1.1069. Adding to the euro’s woes there was a pullback in bets on a European Central Bank interest rate hike—German government bond yields plunged on Tuesday. “For the euro which is front and centre with regard to the impact on trade relations, energy supplies, and the economy, it’s all negative,” said Colin Asher, senior economist at Mizuho. The dollar gained again, with the dollar index rising 0.4 percent to 97.755. The safe-haven Swiss franc outperformed, with the euro down 0.4 percent at $1.0186—another seven-year low. Russian forces were attempting to encircle and subdue Ukrainian cities with intensifying bombardments on Wednesday, …