EUR/USD was calm, trading on both sides of the 1.1000 level. In the European session, the currency was at 1.0988.
Rubles only, please
The euro continued to trade in choppy waters, unable to maintain any momentum due to the uncertainties over the war in Ukraine. Russian President Putin through a monkey wrench into the mix on Wednesday, when he announced that payments for Russian natural gas by "unfriendly nations" would have to be paid in Russian rubles. This appeared to be an illegal move by Putin, but then again, he does hold the cards when it comes to supplying the energy needs of Western Europe. The crafty move by Putin, which shook up the energy markets, was another headwind for which the euro to contend.
The surge in global inflation saw the major central banks respond with tighter policy, with the notable exception of the European Central Bank. Earlier this week, ECB President Lagarde acknowledged that the Fed and ECB were moving out of sync, a clear sign that Lagarde did not intend to change the Bank’s dovish stance, even though inflation continued to accelerate in the eurozone.
Lagarde noted that Europe was more exposed to the war in Ukraine than the US, due to geographical proximity, and the war will have very different effects on the US and on the eurozone, which required different monetary policies.
As expected, German PMIs slowed in February. Manufacturing PMI dropped from 58.4 to 57.6, and Services PMI fell from 55.8 to 55.0 points. Investors didn’t seem all that concerned, as the readings managed to beat the forecasts. It was a similar story for the eurozone PMIs, as the manufacturing and services sectors continued to show growth.
EUR/USD Technical
- 1.0923 was the first line of support, followed by 1.0794
- There was resistance at 1.1030, followed by 1.1159