News that a possible “permanent” ceasefire between Russia and Ukraine is currently being negotiated has helped to lift the common currency Euro out of its recent doldrums; however, currency analysts have pointed out that there are conflicting reports which could tend to limit any additional gains. The president of the Ukraine announced earlier that an agreement had been reached with the Russian president but later press departments clarified that statement, saying no ceasefire agreement had been made, only negotiated steps toward peace, as Russia was not an actual or “official” party to the conflict. As a result of the mixed messages, trading in the Euro was extremely volatile; however, Euro bulls were satisfied with the process and pushed the Euro higher.
As reported at 7:41 a.m. (EDT) in New York, the EUR/USD was trading at $1.3155, a gain of 0.1% in the trading session and moving away from Tuesday’s 1-year trough of $1.3110. With the Euro’s rise, the U.S. Dollar Index edged lower to 82.85 .DXY, a loss of 0.17% from the day’s peak at 83.058 .DXY. The U.S. Dollar Index is viewed as a good barometer of the Dollar’s strength, relative to a weighted basket of its peers.
Euro Sentiment Could Shift
Euro bears could control sentiment as the week progresses, given that the European Central Bank will soon announce its monetary policy decision and there is a growing speculation that it might include some form of quantitative easing although the timing for additional easing is still in question.