The situation in Ukraine continues to deteriorate, and that is impacting confidence across the eurozone. The pessimism starting to rise in the 18-nation currency region is impacting the euro, and sending it lower against some of its counterparts.
The latest confidence reading of the Economic Sentiment Indicator, used by the European Commission, indicates a drop from 102.5 to 102 in March. This is the first time that confidence hasn’t risen since April 2013. The news has many concerned that the eurozone economy could suffer a blow if confidence continues to disappear.
The eurozone had been seeing an upsurge in optimism recently, with sentiment improving and business and economic conditions improving. It’s been helping the euro. However, the difficulties in Ukraine are changing the story. Russia has annexed Crimea, and tensions continue in Eastern Ukraine, where pro-Russian militias and soldiers are occupying government buildings. Vladimir Putin has expressed support for them, and seems to be preparing for another annexation.
With all of this, the eurozone is struggling. European leaders don’t want to lose the energy that comes via Ukraine, but at the same time they feel it sets a bad precedent to let Russia do what it wants.
At 13:10 GMT EUR/USD is down to 1.3825 from the open at 1.3851. EUR/GBP is down to 0.8213 from the open at 0.8242. EUR/JPY is down to 141.9135 from the open at 141.9570.
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