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Weekly Roundup: Euro sinks amid renewed Ukraine concerns

currency-newsWeekly Roundup: Euro sinks amid renewed Ukraine concerns
The euro spent most of last week’s session on the defensive, undermined by concerns over the war in Ukraine.

This came amidst fading hopes for a negotiated end to the conflict as rhetoric from both Russian and Ukrainian officials appeared to harden.

EUR investors were also spooked by reports that the EU was mulling a ban on Russian oil exports, despite German officials quickly shooting this down.

The euro briefly attempted to mount a recovery with the publication of the Eurozone’s latest PMI releases. March’s preliminary figures reported a smaller-than-expected drop in both manufacturing and service sector growth.

Closing out the week was the publication of Germany’s latest IFO business climate index, March’s index reported a larger-than-expected slump in business morale due to the war in Ukraine, keeping the pressure on EUR exchange rates through to the end of the week.

In the spotlight for EUR investors this week will be the Eurozone’s consumer price index, with economists forecasting inflation in the bloc will have rocketed to a new record high this month.

Another dramatic jump in inflation may be seen as placing more pressure on the European Central Bank (ECB) to raise interest rates this year. Any pricing in of a 2022 rate hike could help the euro to mount a comeback.

Otherwise the situation in Ukraine is likely to continue to act as a key catalyst of movement in the euro. Could some positive progress in peace talks help to bolster the single currency?
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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