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Weekly Roundup: Euro weighed on by Russia worries

Amy Richards October 24th 2022 - < 1 minute read

The euro came under pressure as trade opened on Monday, with investors increasingly concerned about the escalation of the Russia-Ukraine war.

Mixed German data saw EUR move without a clear directional bias on Tuesday. Europe’s largest economy saw an unexpected improvement in economic sentiment this month, although morale remains near multi-year lows.

Mid-week, the Eurozone’s final CPI printed below preliminary estimates. This dampened expectations for European Central Bank interest rate rises, causing the euro to soften.

The end of the week brought further losses as the gloomy mood around the Ukraine crisis kept pressure on EUR, despite a surprise rise in Eurozone consumer confidence on Friday.

This week, the key focus is the ECB interest rate decision on Thursday. With a 75bps rate rise already priced in, markets will be trying to gauge the size of future increases. Signals of more large hikes to come could boost EUR.

Until then, downbeat German data and Russia-Ukraine fears could keep pressure on the single currency.

Written by
Amy Richards

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