Euro Steady As Fighting Resumes In Ukraine

The euro was steady below $1.27 on Tuesday morning as investors kept an eye on the region’s economic data, hoping for any clues about the European Central Bank’s plans for Thursday’s meeting. The common currency traded at $1.2689 at 4:00 GMT, little changed from Monday despite better than expected economic data from Germany.

Data out on Monday showed that Germany’s annual inflation increased more than forecast in September, a sign that the eurozone’s inflation rate as a whole may have stabilized as well. The figure showed that Germany’s consumer price inflation remained at 0.8 percent for the third straight month. The data was a good sign, but will do little to take the pressure off of the ECB to ease further as the reading is still relatively low.

Renewed fighting in Ukraine over the weekend also weighed on the region as the conflict between national forces and separatist rebels flared up in Donetsk. The fighting has left at least 12 dead and serves as a reminder that the problems in Ukraine are far from over. 

The Wall Street Journal reported that German President Angela Merkel called on Western leaders to continue putting pressure on Russia by using economic sanctions. Merkel said that the economic pressure is necessary in order to maintain political negotiations, and that the eurozone may need to reduce its reliance on Russian energy supplies. Germany already receives about a third of its gas imports from Russia, something that may need to change if the sanctions war between the West and Russia continues to escalate.