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Weekly roundup: Euro plunges to 20-month low after war returns to Europe

currency-newsWeekly roundup: Euro plunges to 20-month low after war returns to Europe
The euro came under some notable volatility last week as the single currency proved particularly sensitive to the Ukraine crisis.

EUR investors raised concerns over what impact a war in Eastern Europe could have on the Eurozone economy, with fears the conflict could disrupt energy supplies and increase inflationary pressures.

This resulted in some volatility in the euro in the first half of the week as Russian President Vladimir Putin’s move to recognise parts of Eastern Ukraine as independent states initially sparked some selling, before a lukewarm response to initial Western sanctions on Russia helped EUR exchange rates to rebound.

Of course this volatility was negligible versus what we saw in the second half of the week as Russia shocked the world by launching a full-scale invasion of Ukraine.

This saw the EUR/USD exchange rate plunge to a 20-month low on Thursday, before hopes for a possible ceasefire helped the euro to recoup some of its losses at the end of the week.

Turning to this week’s session, following a ratcheting up of Russian sanctions by Western powers in response to escalating violence in Ukraine over the weekend, the euro has found itself coming under some notable pressure. A trend which may continue through the week if tensions continue to flare.

Elsewhere, the publication of the Eurozone’s consumer price index could offer some support to the euro if another uptick in inflation is seen as increasing the chances of the European Central Bank (ECB) hiking interest rates later in the year.
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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