Markets rocked by news from eastern Ukraine

Claire Hogarth18/Jul/2014Currency Updates

EUR

The Consumer Price Index printed flat YoY for the Eurozone, not budging from the 0.8% consensus but still some way from the 2% target set by the ECB.

Doubt continues to loom over the stimulus program as Moody has argued that with sovereign bond yields already very low in the euro area, QE would have less of an impact than it had for the countries that started purchasing assets more quickly after the financial crisis.

There are ripples of doubt swelling into the market as QE may not be the mechanism to resolve the crisis on the continent. The Eurozone needs to make a significant dent in unemployment or to put the debt dynamics of the peripheral countries in a clearly sustainable tack.

There are no data releases of note out today.

GBP

There was little data of note out in the UK yesterday with sterling trading with little volatility against its most traded pairs. The same looks to be the case today with no data set for release.

The FTSE opened 0.5% lower this morning after the news that a Malaysian Airlines flight had crashed over eastern Ukraine. The Russian stock market also dipped 1.5% on the news.

A recent poll to measure the strength of the vote for independence for Scotland is showing that the gap is closing on the No vote.

USD

Officials from the European Union and the US will spend this week in Brussels trying to make progress negotiating a controversial trade deal. The Trans-Atlantic Trade and Investment Partnership (TTIP) aims to stimulate commerce by reducing barriers such as tariffs and differences in regulation.

The yen rose against the dollar and euro on Thursday after investors moved into haven assets in response to news that a Malaysia Airlines plane with 295 passengers on board crashed in eastern Ukraine. The dollar fell 0.4% versus the yen, to ¥101.23 in late afternoon trade. The euro lost 0.4% against the yen, to ¥136.94, tumbling to its lowest level since Feb. 6th.

The dollar lost ground against rivals earlier in the session after the U.S. posted surprisingly weak numbers for housing starts in June. However, data also showed a slight decline in initial weekly unemployment claims and a strong report on business conditions in the mid-Atlantic region in July.

News out today includes Prelim UoM Consumer Sentiment which is forecasted to be an improvement on last month’s figure of 82.5.

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Written by Claire Hogarth

Marketing Executive at Ebury. English Literature graduate from the University of York and a motivated professional.