The euro is under broad pressure and is trading at two-week lows against the US dollar, with the single currency hit by uncertainty concerning both Ukraine and upcoming eurozone economic data. The Ukrainian conflict now appears to be having a more substantial impact on financial markets after Russia readied troops near its border. The pound rose to one-week highs against the euro after Britain’s revised GDP data gave investors no concerns about the UK’s economic outlook. Sterling is weaker against the US dollar, however, and may fall further if the speech from Federal Reserve chairwoman, Janet Yellen, encourages more traders back into the US dollar. The euro’s poor start to the session comes on the back of weaker revisions to Spanish GDP figures and amid concerns that the German inflation data will weigh on the important eurozone inflation release.

Sterling

The sterling has climbed to one-week highs against the euro with the single currency under pressure ahead of critical inflation and unemployment figures from the eurozone. The pound also found support from revised GDP figures covering the British economy’s output over the fourth quarter. The data, which showed no changes from initial estimates, kept intact optimism about a stronger economy leading the Bank of England towards higher interest rates. The pound does find itself weaker against the US dollar and another step lower compared to a recent four-year high.

US dollar

The US dollar has opened strongly, climbing overnight to a two-week high against the euro amid ongoing turmoil in Ukraine and concerns ahead of critical eurozone data over the coming days ahead of the European Central Bank’s policy decision next week. The Federal Reserve chairwoman will be speaking with a positive outlook for the US economy, despite a run of poor weather-hit economic data, could lead the US dollar higher. Surprisingly robust US new home sales data for January, the strongest in five years, also supported the greenback.

Euro

The euro fell by almost 0.6 per cent at one stage against the pound and is trading at two-week lows against the US dollar. The ECB surprised many market participants earlier this month by introducing no further monetary stimulus despite concerns about future deflation risks. President Mario Draghi said that economic data through February and its own economic forecasts in March will allow them to make a more informed decision about stimulus next week.

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