Euro Weighed Down By Eurozone Data

The euro was steady at $1.3407 at 8:30 GMT on Tuesday morning as investors cautiously eyed the upcoming European Central Bank meeting.

Although last week’s U.S. non-farm payrolls data report did not live up to expectations, the euro has been unable to make any sizable gains with most expecting the bank to strike a dovish tone at Thursday’s meeting.

Although the bank is not expected to make any policy changes at this month’s meeting, most see bank President Mario Draghi addressing the possibility of further easing as the region’s data has been continually poor. 

Inflation data out last week showed that the region’s consumer prices only increased by 0.4 percent annually in July, a drop from June’s already dangerously low 0.5 percent increase.

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Also weighing on the common currency is the current situation in Ukraine which has caused tension between the West and Russia to reach an all time high. In response to Moscow’s participation in the ongoing conflict in Ukraine, the EU has enacted stricter sanctions against Russia that target large sectors of the nation’s economy like banking and energy.

However, since Russia is one of the bloc’s largest trading partners, many are worried that the sanctions will also deal a blow to the eurozone economy.

Reuters reported that the Sentix index that measures sentiment among investors showed an unexpected drop in morale with a reading of 2.7 in August, a one year low. The figure was much higher at 10.1 percent in July, and came in far below expectations of a 9.0 reading.

With the bloc already struggling to tame sky high unemployment figures and combat falling inflation, the situation with Russia is further muddying investors’ outlook for the region.