Euro Remains Below $1.32 With ECB Meeting On The Horizon
The euro continued to sink on Wednesday morning as speculation that the European Central Bank will ease further at Thursday’s meeting grew. The common currency traded at $1.313 at 5:00 GMT following a spate of disappointing economic data.
Data out on Monday showed that factory activity in the bloc slowed in August as the sanctions against Russia also dealt a blow to the eurozone economy. The region’s reading came in at 50.7, just a hair over the 50-point mark that indicates expansion and a marked decline from July’s 51.8 reading.
The figures came amid growing tension between Russia and the West as the United States and the EU work to settle the worsening conflict in Ukraine. Kiev has accused Moscow of sending military supplies and troops across the border in support of the pro-Russian separatists that are fighting for control in the eastern part of the nation.
Russian President Vladimir Putin has called for negotiations between Kiev and the rebels in order to discuss making eastern Ukraine an independent state. However, Putin has denied any direct involvement in the conflict.
With the situation in Ukraine escalating, the West is working on new sanctions to further isolate Russia economically. The Wall Street Journal reported that the European Union is set to make a decision about further sanctions on Friday, something that could have as large an effect on the eurozone economy as it does on Moscow. The eurozone has already sanctioned Russia’s energy, defense and banking sectors, and the Kremlin has threatened to retaliate if more restrictions are imposed.
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