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Euro extends losses on Ukraine concerns and oil ban rumours

currency-newsEuro extends losses on Ukraine concerns and oil ban rumours
The euro got off to a poor start again this week as the war in Ukraine continued to sap EUR sentiment.

Meanwhile, trade in the pound is mixed so far this morning, with GBP/EUR dipping to €1.2134 and GBP/USD flat at $1.3117. GBP/CAD has accelerated to C$1.6821, while GBP/AUD and GBP/NZD advance to AU$1.80136 and NZ$1.9237, respectively.

Looking ahead, the US dollar looks poised to extend its rally as Ukraine developments continue to dictate market movements.

What’s been happening?

The euro remained on the defensive at the start of this week, stretching its losing streak into its sixth consecutive session as the Ukraine crisis rumbled on.

EUR investors were particularly spooked by reports the US and EU had begun to explore a possible ban on Russian oil imports, amidst fears this could disrupt European energy supplies and stoke inflation in the Eurozone.

However, the single currency’s losses look to have been capped somewhat by some positive German data, with both factory orders and retail sales printing above expectations in January.

The pound also trended lower during yesterday’s European session, with the GBP/USD exchange rate briefly testing a new 16-month low.

The slump in Sterling sentiment also appeared connected to reports of a possible ban on Russian oil amidst fears this could dramatically increase the price at pumps and place further pressures on UK consumers.

The US dollar, meanwhile, continued to trend higher on Monday as jittery investors continued to favour safe-haven assets.

A modest recovery in risk sentiment reversed some of the ‘greenback’s gains through the second half of the session, before reports the US may move ahead with a ban on Russian oil without the EU drove fresh demand.

What’s coming up?

Looking ahead, it seems safe to assume the war in Ukraine will continue to drive market movements today, likely extending the downtrend in the euro and underpinning demand for the US dollar, after the latest round of peace talks ended without a breakthrough.

In the meantime, the publication of Germany’s latest industrial production figures could help to temper the euro’s losses, after data published earlier this morning reported factory output rebounded much more strongly than expected in January.

Finally in the absence of any notable GBP data the pound may continue to suffer as a result of Ukraine related jitters.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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