The 18-bloc common currency was seen trading lower against the US dollar on Monday, dragged lower by the disappointing CPI data, which revealed a downward movement in February.
The euro dropped under $1.3900 per US dollar at the opening of the Asian trading session; following Sunday’s Crimean referendum which showed the Crimea peninsula backed leaving Ukraine to join Russia and could possibly spurred a Cold War between the countries. Tensions between the countries added to the greenback’s strength.
The euro edged 0.12% lower to $1.3888 at the time of writing, after climbing to an intra-day high of $1.3915 before the release of the CPI data.
Following the Black sea peninsula’s referendum to spilt from Ukraine and join the Russian Federation, the Western nations and the US Secretary of State John Kerry warned Russia that it would not accept the vote and should expect sanctions, while foreign ministers from the European Union are expected to meet in Brussels to discuss possible similar actions later in the day.
The US President Barack Obama and the Ukrainian government have considered the referendum illegal, “The world won’t recognize the Crimea vote,” Obama said on Sunday.
“The euro is expected to further trade at around the $1.39 area, reflecting dollar swings and the increased relevance of the euro gains for price stability, which ECB President Mario Draghi reaffirmed last week,” UniCredit quoted on Monday.
The revised Consumer Price Index (CPI) in the eurozone came in below expected for February, coming in at 0.7% on an annual basis, compared to forecasts of 0.8%, the same as the flash reading released earlier in this month.
The consumer inflation on a monthly basis came in at 0.3%, compared to a forecast of 0.4% and the preliminary reading which revealed a 1.1% contraction.
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