Euro Under More Pressure As Russian Sanctions Are Implemented

The euro looked set to finish the week near $1.28 as the dollar climbed ahead of the Federal Reserve’s upcoming policy meeting.

The common currency traded at $1.2922 at 10:00 GMT as the European Central Bank and the Fed continued to diverge.

Reuters reported that ECB Vice President Vitor Constancio admitted that the bank hasn’t ruled out a quantitative easing program, though it is a strategy they’d prefer not to employ.

The bank announced a second easing package at its policy meeting last week but did not elect to buy up government debt, and instead focused on increasing the flow of credit.

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Meanwhile, the U.S. Federal Reserve is moving in the opposite direction as it continues to taper its own asset purchase program. With the bank’s policy meeting coming up next week, investors are speculating about whether the bank will provide markets with any clues about its rate hike timeline.

Fed Chair Janet Yellen has remained cautious about a rate hike, saying the bank will not make a move until it is absolutely certain that the U.S. economy can stand on its own. However, she has also indicated that a sooner than expected rate hike could be a possibility if the labor market improves faster than expected.

The euro fell under more pressure on Thursday when it was announced that the EU was moving forward with its latest round of sanctions against Russia. A ceasefire agreement in Ukraine has ended much of the region’s violence for now, but Western leaders are still pushing Moscow to use its influence in order to find a peaceful solution for both sides.