Unfortunately, the euro failed to sustain its strengthening from the results of the European Central Bank (ECB) policy meeting due to strong US dollar trading and gloom in the prospects of Ukraine-Russia negotiations.
ECB President Christine Lagarde unexpectedly announced a phased reduction in its asset purchase program (APP) which is expected to end in the third quarter, thus opening up opportunities for rate hikes by the end of the year.
However, Lagarde acknowledged that the current geopolitical crisis between Ukraine and Russia has triggered new risks to Europe, but told the central bank will do anything to maintain price stability.
Following the ECB decision, the euro jumped around 1.112 but fell back below 1.100 following stronger greenback dollar trading after witnessing the release of US inflation data.
The consumer price index (CPI) met expectations by rising to a 40 -year high of 7.9% on an annual basis in February. This increase puts the Wall Street market under pressure that has already been affected by current geopolitical uncertainties.
The Federal Reserve (Fed) will meet next week and there is no doubt that they will start raising interest rates for the first time since 2018.
Meanwhile, the fourth round of talks between Russia and Ukraine ended with no agreement on a ceasefire and humanitarian corridors. International sanctions against Russia continue to rise, but Moscow still shows no signs of stopping its attacks.
