Article by ForexTime
The euro fell to a fresh one- year-low against the dollar today, as the single currency is under pressure on concerns over the Ukraine crisis and also ahead of a key risk event this week-the European Central Bank policy meeting.
EURUSD touched $1.3119 in early Asian session trading, the lowest since early September 2013. Against sterling the euro hit a five-week low of 78.96 pence.
The risk to euro zone growth posed by the Ukraine conflict should keep the pressure on the euro as Ukrainian President Petro Poroshenko warned a “full-scale war” was imminent if Russian troops continued an advance in support of pro-Moscow rebels as Europe and the United States threatened Russia with new sanctions.
Meanwhile, stubbornly low inflation in the Eurozone should also increase the likelihood that the European Central Bank would act to provide further stimulus. This week’s ECB meeting will be closely watched.
Some analysts believe it was too soon for the ECB to announce new policy measures at this month’s meeting. This would help lend some support to the euro and may even provide a short-term rally.
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A close eye will be kept on the EURCHF pair since it has fallen dangerously close to the floor of the key 1.20 CHF rate imposed by the Swiss National Bank in September 2012. Thomas Jordan, the head of the SNB said the central bank stood ready to intervene in the currency market to defend its cap on the franc.
Article by ForexTime
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