Euro Remains Below $1.30 With Possible Russian Sanctions Weighing

The euro sunk even lower on Tuesday as the eurozone economy showed no signs of improvement despite some progress in the conflict in Ukraine and the European Central Bank’s easing announcement on Thursday.

The common currency slipped below $1.29 and traded at $1.2887 at 10:00 GMT as markets looked to Eastern Europe to see if a ceasefire agreement in Ukraine would hold.

Last week, eurozone policymakers agreed to implement more sanctions against Russia in an effort to push Moscow to back out of the region’s conflict and work toward a political resolution. The sanctions were set to go into effect on Tuesday, but The Wall Street Journal reported that some eurozone nations want to hold off in order to see how negotiations between separatists and Kiev progress over the next few days.

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The new round of sanctions would further isolate Russia economically by targeting the nation’s energy and defense sectors. However, if the talks prove successful and the Kremlin aids in finding a peaceful resolution, the restrictions will likely be lifted.

The euro fell under a great deal of pressure last week when the European Central Bank announced that it would combat the region’s falling inflation and stagnant economy with further easing measures, but despite the bank’s best efforts, investors were still weary about the bloc’s future.

The Sentix sentiment index fell to -9.8 this month, the lowest reading in nearly a year. The figure was troubling as most had expected to see a 2.0 reading following promises from the ECB to do “whatever it takes” to keep the region afloat.