Weekly Roundup: Euro undermined by Ukraine concerns
Amy Richards February 27th 2023 - < 1 minute read
The euro came out of last week’s session a little worse for ware as concerns over Russia’s next moves in Ukraine cast a dark cloud over the single currency.
This saw EUR exchange rates slump through the first half of the week after Russian President Vladimir Putin struck a defiant tone in his first State of the Nation address since he launched his illegal invasion of Ukraine.
Putin’s comments quashed any hopes for a negotiated end to the conflict coming anytime in the near future and overshadowed a robust Eurozone PMI release.
The euro then remained firmly on the back foot through the second half of the session. The single currency was pressured by its negative correlation with the US dollar, in addition to some underwhelming German data.
Germany’s final GDP reading for the last quarter of 2022 reported the Eurozone’s largest economy shrank more than expected and is at risk of slipping into a recession.
In the spotlight this week will be the publication of the Eurozone’s latest consumer price index. February’s index is expected to report another sizable slowing of inflation.
This could dent expectations for further interest rate hikes from the European Central Bank (ECB) and pull the euro even lower this week.
Written by
Amy Richards