Euro, stocks wary ahead of Greece meetings

By Marc Jones

LONDON (Reuters) – European stocks and the euro fell on Wednesday while the dollar edged higher as euro zone meetings on the Greek debt crisis threatened to give rise to confusion rather than clarity.

Euro zone finance ministers meet on Wednesday and EU leaders on Thursday, but officials are already playing down chances of a breakthrough.

European shares <.FTEU3> inched lower, led by a 3.8 percent drop in Greek shares <.ATG>, while the euro and bonds from Greece, Portugal and Ireland also dipped.

New Greek Finance Minister Yanis Varoufakis will spell out a plan to drop his country’s bailout and end austerity at the meeting in Brussels, and seek a temporary agreement to buy time until June for a properly negotiated settlement.

The rest of the euro zone led by Germany, however, is sticking to the view that Athens needs to push on with spending cuts and privatizations if funding support is to continue.

“We have relatively low expectations about a solution being agreed,” said Vasileios Gkionakis, UniCredit’s Global Head of FX Strategy.

“I think this meeting is all about laying down the plans and explaining where the two sides disagree. And I think it will set the stage for some increased volatility over the next few days.”

As the euro sagged to $ 1.1313 under the Greek uncertainty, the dollar remained firm as traders continued to bet on the first U.S. interest rate hike in almost a decade later this year.

The dollar hit a one-month high against the yen of 119.77 bolstered by a recent rise in Treasury yields – a reflection of rate hike expectations. Trade was thin, though, with Japanese markets closed for a public holiday.

UKRAINE TALKS

Tokyo’s day off kept moves in other Asian equity markets in check.

MSCI’s broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> ended off 0.3 percent. Australia’s main index <.AXJO> slipped 0.6 percent to offset a 0.2 percent gain for shares in Shanghai <.SSEC>.

In commodity markets, U.S. crude futures bounced 40 cents to $ 50.42 a barrel on news of a smaller-than-expected rise in crude inventories. Brent crude gained 25 cents to $ 56.71, having shed $ 1.91 on Tuesday.

Traditional safe haven gold rose 0.3 percent to $ 1,237.70 an ounce, reversing a similar drop on Tuesday, while copper climbed to $ 5,657 a tonne as traders prepared to wind down for the Lunar New Year in the metal’s biggest market, China.

The rouble fell before talks between Russia, Ukraine, France and Germany in Belarus aimed at bringing an end to fighting in eastern Ukraine, with analysts predicting volatile trading.

Ahead of the meeting, Ukraine said 19 soldiers had been killed in rebel attacks near the strategic town of Debaltseve, while rebel representatives denied an earlier report that a ceasefire had been agreed.

There was also move volatility in Nigeria, one of Africa’s largest economies. The naira lost more ground as it slipped to 202.75 to the dollar

It has hit repeated record lows this week after a delay to presidential elections stirred concerns about political stability and amid fears about the central bank’s ability to manage a currency hammered by weak oil prices.

(Reporting by Marc Jones; editing by John Stonestreet)

Global stocks, euro wary ahead of Greece meetings

By Marc Jones

LONDON (Reuters) – European stocks and the euro fell on Wednesday while the dollar edged higher as euro zone meetings on the Greek debt crisis threatened to give rise to confusion rather than clarity.

Euro zone finance ministers meet on Wednesday and EU leaders on Thursday, but officials are already playing down chances of a breakthrough. [TOP/EURO]

European shares inched lower, led by a 3.8 percent drop in Greek shares, while the euro and bonds from Greece, Portugal and Ireland also dipped.

New Greek Finance Minister Yanis Varoufakis will spell out a plan to drop his country’s bailout and end austerity at the meeting in Brussels, and seek a temporary agreement to buy time until June for a properly negotiated settlement.

The rest of the euro zone led by Germany, however, is sticking to the view that Athens needs to push on with spending cuts and privatisations if funding support is to continue.

“We have relatively low expectations about a solution being agreed,” said Vasileios Gkionakis, UniCredit’s Global Head of FX Strategy.

“I think this meeting is all about laying down the plans and explaining where the two sides disagree. And I think it will set the stage for some increased volatility over the next few days.”

As the euro sagged to $ 1.1313 under the Greek uncertainty, the dollar remained firm as traders continued to bet on the first U.S. interest rate hike in almost a decade later this year.

The dollar hit a one-month high against the yen of 119.77 bolstered by a recent rise in Treasury yields – a reflection of rate hike expectations. Trade was thin, though, with Japanese markets closed for a public holiday. [FRX/]

UKRAINE TALKS

Tokyo’s day off kept moves in other Asian equity markets in check.

MSCI’s broadest index of Asia-Pacific shares outside Japan ended off 0.3 percent. Australia’s main index slipped 0.6 percent to offset a 0.2 percent gain for shares in Shanghai.

In commodity markets, U.S. crude futures bounced 40 cents to $ 50.42 a barrel on news of a smaller-than-expected rise in crude inventories. Brent crude gained 25 cents to $ 56.71, having shed $ 1.91 on Tuesday.

Traditional safe haven gold rose 0.3 percent to $ 1,237.70 an ounce, reversing a similar drop on Tuesday, while copper climbed to $ 5,657 a tonne as traders prepared to wind down for the Lunar New Year in the metal’s biggest market, China.

The rouble fell before talks between Russia, Ukraine, France and Germany in Belarus aimed at bringing an end to fighting in eastern Ukraine, with analysts predicting volatile trading.

Ahead of the meeting, Ukraine said 19 soldiers had been killed in rebel attacks near the strategic town of Debaltseve, while rebel representatives denied an earlier report that a ceasefire had been agreed.

There was also move volatility in Nigeria, one of Africa’s largest economies. The naira lost more ground as it slipped to 202.75 to the dollar

It has hit repeated record lows this week after a delay to presidential elections stirred concerns about political stability and amid fears about the central bank’s ability to manage a currency hammered by weak oil prices.

(Reporting by Marc Jones; editing by John Stonestreet)

GLOBAL MARKETS-Euro, stocks wary ahead of Greece meetings

* Stocks, euro edge lower ahead of euro zone meetings on Greece * Dollar mostly higher with yields, oil struggles to bounce * Russian, Ukraine markets sag ahead of Minsk meeting By Marc Jones LONDON, Feb 11 (Reuters) – European stocks and the euro fell on Wednesday while the dollar edged higher as euro zone meetings on the Greek debt crisis threatened to give rise to confusion rather than clarity.

Euro zone finance ministers meet on Wednesday and EU leaders on Thursday, but officials are already playing down chances of a breakthrough.

European shares inched lower, led by a 3.8 percent drop in Greek shares, while the euro and bonds from Greece, Portugal and Ireland also dipped.

New Greek Finance Minister Yanis Varoufakis will spell out a plan to drop his country’s bailout and end austerity at the meeting in Brussels, and seek a temporary agreement to buy time until June for a properly negotiated settlement.

The rest of the euro zone led by Germany, however, is sticking to the view that Athens needs to push on with spending cuts and privatisations if funding support is to continue.

“We have relatively low expectations about a solution being agreed,” said Vasileios Gkionakis, UniCredit’s Global Head of FX Strategy.

“I think this meeting is all about laying down the plans and explaining where the two sides disagree. And I think it will set the stage for some increased volatility over the next few days.” As the euro sagged to $ 1.1313 under the Greek uncertainty, the dollar remained firm as traders continued to bet on the first U.S. interest rate hike in almost a decade later this year.

The dollar hit a one-month high against the yen of 119.77 bolstered by a recent rise in Treasury yields – a reflection of rate hike expectations. Trade was thin, though, with Japanese markets closed for a public holiday.

UKRAINE TALKS Tokyo’s day off kept moves in other Asian equity markets in check.

MSCI’s broadest index of Asia-Pacific shares outside Japan ended off 0.3 percent. Australia’s main index slipped 0.6 percent to offset a 0.2 percent gain for shares in Shanghai.

In commodity markets, U.S. crude futures bounced 40 cents to $ 50.42 a barrel on news of a smaller-than-expected rise in crude inventories. Brent crude gained 25 cents to $ 56.71, having shed $ 1.91 on Tuesday.

Traditional safe haven gold rose 0.3 percent to $ 1,237.70 an ounce, reversing a similar drop on Tuesday, while copper climbed to $ 5,657 a tonne as traders prepared to wind down for the Lunar New Year in the metal’s biggest market, China.

The rouble fell before talks between Russia, Ukraine, France and Germany in Belarus aimed at bringing an end to fighting in eastern Ukraine, with analysts predicting volatile trading.

Ahead of the meeting, Ukraine said 19 soldiers had been killed in rebel attacks near the strategic town of Debaltseve, while rebel representatives denied an earlier report that a ceasefire had been agreed.

There was also move volatility in Nigeria, one of Africa’s largest economies. The naira lost more ground as it slipped to 202.75 to the dollar It has hit repeated record lows this week after a delay to presidential elections stirred concerns about political stability and amid fears about the central bank’s ability to manage a currency hammered by weak oil prices.

(Reporting by Marc Jones; editing by John Stonestreet)

Euro, stocks wary ahead of crunch Greece meeting

By Marc Jones

LONDON (Reuters) – European stocks and the euro fell on Wednesday while the dollar edged higher as euro zone meetings on the Greek debt crisis threatened to give rise to confusion rather than clarity.

Euro zone finance ministers meet on Wednesday and EU leaders on Thursday, but officials are already playing down chances of a breakthrough. [TOP/EURO]

European shares (.FTEU3) inched lower, led by a 3.8 percent drop in Greek shares (.ATG), while the euro and bonds from Greece, Portugal and Ireland also dipped.

New Greek Finance Minister Yanis Varoufakis will spell out a plan to drop his country’s bailout and end austerity at the meeting in Brussels, and seek a temporary agreement to buy time until June for a properly negotiated settlement.

The rest of the euro zone led by Germany, however, is sticking to the view that Athens needs to push on with spending cuts and privatisations if funding support is to continue.

“We have relatively low expectations about a solution being agreed,” said Vasileios Gkionakis, UniCredit’s Global Head of FX Strategy.

“I think this meeting is all about laying down the plans and explaining where the two sides disagree. And I think it will set the stage for some increased volatility over the next few days.”

As the euro sagged to $ 1.1313 under the Greek uncertainty, the dollar remained firm as traders continued to bet on the first U.S. interest rate hike in almost a decade later this year.

The dollar hit a one-month high against the yen of 119.77 bolstered by a recent rise in Treasury yields – a reflection of rate hike expectations. Trade was thin, though, with Japanese markets closed for a public holiday. [FRX/]

UKRAINE TALKS

Tokyo’s day off kept moves in other Asian equity markets in check.

MSCI’s broadest index of Asia-Pacific shares outside Japan ended off 0.3 percent. Australia’s main index (.AXJO) slipped 0.6 percent to offset a 0.2 percent gain for shares in Shanghai (.SSEC).

In commodity markets, U.S. crude futures (CLc1) bounced 40 cents to $ 50.42 a barrel on news of a smaller-than-expected rise in crude inventories. Brent crude (LCOc1) gained 25 cents to $ 56.71, having shed $ 1.91 on Tuesday.

Traditional safe haven gold (XAU=) rose 0.3 percent to $ 1,237.70 an ounce, reversing a similar drop on Tuesday, while copper climbed to $ 5,657 a tonne as traders prepared to wind down for the Lunar New Year in the metal’s biggest market, China.

The rouble fell before talks between Russia, Ukraine, France and Germany in Belarus aimed at bringing an end to fighting in eastern Ukraine, with analysts predicting volatile trading.

Ahead of the meeting, Ukraine said 19 soldiers had been killed in rebel attacks near the strategic town of Debaltseve, while rebel representatives denied an earlier report that a ceasefire had been agreed.

There was also move volatility in Nigeria, one of Africa’s largest economies. The naira lost more ground as it slipped to 202.75 to the dollar (NGN=D1)

It has hit repeated record lows this week after a delay to presidential elections stirred concerns about political stability and amid fears about the central bank’s ability to manage a currency hammered by weak oil prices.

(Reporting by Marc Jones; editing by John Stonestreet)

Euro plunges to lowest since 2012

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Russia Seen Spending Further $70 Billion to Fight Ruble Rout

The Bank of Russia will probably intensify interventions and spend almost a sixth of its reserves after its emergency increase of interest rates failed to stem the ruble’s worst crisis since 1998, according to a survey of economists.

Unlimited currency interventions are the most likely response to the ruble’s freefall, and the central bank will deploy $ 70 billion to counter the turmoil, according to the survey of 18 economists and the median of estimates given. Further rate increases and the imposition of capital controls ranked as the next most probable policy actions.

The country’s $ 416 billion reserves are moving back into the first line of defense against the crisis ravaging Russia after the central bank shifted to a free-floating exchange rate ahead of schedule last month. It’s failed to prop up the ruble with 750 basis points of rate increases and more than $ 10 billion of interventions this month, allowing the currency to sink beyond 80 a dollar, a record low.

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  • Russia’s Latest Torment: Higher Prices for Everything
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  • Nobody Knows How 21st-Century Russians Will Respond to Crisis

“The full-blown crisis of confidence requires nothing less than aggressive, committed FX intervention,” Phoenix Kalen, an emerging-market strategist at Societe Generale SA in London, said by e-mail. “With that said, the window of time for which direct intervention would be effective in staunching the ruble bloodbath is quickly running out, beyond which the next set of measures to be contemplated would likely be capital controls.”

Emergency Measures

The central bank announced steps to stabilize the financial system. Among the measures is a temporary moratorium on mark-to-market accounting, allowing banks to use the third-quarter exchange rate in valuing risk-weighted assets.

The measures are intended to balance supply and demand on the currency market, helping stabilize the ruble rate as soon as possible and assisting banks with repaying external debt, central bank First Deputy Governor Ksenia Yudaeva said in a statement.

The ruble surged 9.8 percent after the central bank’s announcement, ending a seven-day slide and prompting a rally in the RTS Index and Russian bonds.

Russia’s Finance Ministry started selling foreign currency remaining on the Treasury’s accounts, saying the ruble is “very undervalued.” It has an estimated $ 7 billion in residual amounts that is available for sale, Svetlana Nikitina, an aide to the finance minister, said by phone.

Currency Sales

To counter the panic sweeping the market, Prime Minister Dmitry Medvedev ordered his first deputy, Igor Shuvalov, to work with the central bank and the Federal Financial Monitoring Service to conduct daily oversight of currency sales by exporters.

The central bank, led by Governor Elvira Nabiullina, has so far struggled to reverse the currency plunge even after spending a fifth of its international reserves this year. It can use $ 85 billion for currency operations next year in case of a crisis scenario that puts crude at $ 60 a barrel, Nabiullina, a former economy minister and aide to President Vladimir Putin, said Dec. 11.

Decisive policy action that may include interventions or currency controls will probably be unveiled in the next few days, according to nine of the 18 economists surveyed by Bloomberg.

‘Concerted Action’

“Concerted action by the government and President Putin to support the central bank’s stabilization efforts is likely, such as putting more intensive pressure on exporters to sell foreign currency,” said Tatiana Orlova, the chief economist for Russia at the Royal Bank of Scotland Group Plc in London.

The surprise rate increase announced in the middle of the night in Moscow has failed to stem the run on the currency. The 6.5 percentage-point move, to 17 percent, only stoked a brief rally in the ruble before it began falling. Central bank First Deputy Governor Sergey Shvetsov described the emergency increase as a choice between “very bad and very very bad.”

“If the central bank were to hike the key rate above 20 percent, real economic growth would be annihilated next year, and economic contraction would be measured in multiples of a percentage point,” said Cristian Maggio, head of emerging markets research at Toronto-Dominion Bank in London. “I don’t think the central bank would be ready to pay this price.”

Ukraine, Oil

The ruble has been under pressure since Russia’s takeover of Ukraine’s Crimea in March prompted sanctions. Crude oil, which tumbled to a five-year low, helped send the currency into a tailspin. Russia gets about half of its revenue from oil and gas taxes.

Not a single economist in the survey identified a dramatic change in Putin’s approach to the conflict over Ukraine as the most likely step to defuse the currency crisis.

“Economic calculus does not seem to steer Putin’s Ukraine policy,” said Wolf-Fabian Hungerland, an economist at Berenberg Bank in Hamburg. “If that would have been the case, he would not have invaded the Ukraine in the first place. Rather, Putin seems to balance de-escalating moves with escalating ones.”

To contact the reporters on this story: Andre Tartar in London at [email protected]; Anna Andrianova in Moscow at [email protected]

To contact the editors responsible for this story: Balazs Penz at [email protected] Paul Abelsky, Scott Rose

MORNING BID EUROPE-A daily note from our Economics/Politics Editor

* A daily view from EMEA Economics & Politics Editor Mike Peacock The views expressed are his own.

LONDON, Sept 30 (Reuters) – Euro zone inflation figures are due and after Germany’s rate held steady at 0.8 percent the figure for the currency bloc as a whole could marginally exceed forecasts and hold at 0.4 percent.

One upside for the currency bloc is the falling euro which has broken below its 2013 lows and is down almost nine percent from the peak it hit against the dollar in May.

With U.S. money printing about to end next month and speculation intensifying about the timing of a first interest rate rise from Washington, there are good reasons to think that this trend could continue.

If it does, it would push the prices of imports up while making it easier for euro zone countries to sell abroad which should have an upward impact on both growth and inflation. The impact won’t be instant, however, as today’s figures will demonstrate.

Either way, there is no chance of the European Central Bank doing anything new at its monthly meeting on Thursday having pushed through a range of new measures last time.

We’ve had an early flurry of data. German retail sales jumped 2.5 percent in August, more than reversing a 1.1 percent fall in July.

Britain’s GfK consumer confidence index showed consumer morale edged down from a recent nine-year high as households became slightly less upbeat about the outlook for the economy. The Nationwide housing survey reported a 0.2 percent monthly fall in house prices – the first fall in more than a year – though that still leaves them up 9.4 percent year-on-year.

Final GDP figures for the second quarter, due later, should confirm a quarterly growth rate of 0.8 percent, way above anything the euro zone could hope for.

European Union ambassadors will meet to decide whether the Ukraine ceasefire justifies an easing of sanctions against Russia. Moscow is lobbying for that, calling for a “reset 2.0” in relations with Washington and saying the situation in Ukraine that led to Western sanctions was improving thanks to Kremlin peace initiatives.

But the killing of seven Ukrainian soldiers when a separatist shell hit their armoured personnel carrier near the main airport at Donetsk in eastern Ukraine demonstrates why it is too early for the EU to back off. It was the largest loss of life among Ukrainian soldiers in a single incident since a ceasefire came into force on Sept. 5.

A Russian newspaper reported on Monday that U.S. oil giant ExxonMobil is suspending cooperation with Russia’s state-owned company Rosneft on offshore drilling in the Arctic due to sanctions.

German Chancellor Angela Merkel said there were good reasons to continue the European Union’s energy partnership with Russia for now but that might change if Moscow continues to violate basic principles.

U.S. warplanes attacked Islamic State targets in Syria overnight in raids that a group monitoring the war said killed civilians as well as jihadist fighters. The U.S. military said on Monday an American air strike targeted IS vehicles near to a grain storage facility, but it had no evidence so far of civilian casualties.

A phalanx of new European Commissioners will be subject to confirmation hearings in the European Parliament over the course of this week and next. The parliament will probably want to claim at least one scalp on the list in a demonstration of its influence. Nominees from Britain, France, Spain and Hungary may face particularly stiff interrogation.

Six hearings on Tuesday feature the Greek nominee to handle migration and home affairs and the Austrian nominated to run relations with neighbouring regions and states wanting to join the EU.

One of the highlights will be the appearance on Thursday of Pierre Moscovici, picked as the next economic and financial commissioner. Some have said putting the former French finance minister in charge of issues like budgetary discipline is like putting a fox in charge of the hen coop given Paris’s repeated inability to get its deficit down to the EU limit.

Moscovici will probably get the nod, not least because his role will be overseen by the fiscally hawkish Valdis Dombrovskis from Latvia.

Romania’s central bank holds a rate-setting meeting at which it is expected to further cut its benchmark interest rate to a record low of 3.0 percent to aid a slowing economy. (Editing by Andrew Heavens)

Euro-Area Economic Confidence Falls in Sign ECB Plan Takes Time

Economic confidence within the euro area diminished in September in a sign that the European Central Bank’s measures to shore up the recovery have yet to bear fruit.

An index of executive and consumer sentiment slipped to 99.9 in September from 100.6 a month earlier, the European Commission in Brussels said today. That’s the lowest since November and in line with the median of 25 forecasts in a Bloomberg News survey.

Policy makers meeting in Naples, Italy this week will discuss details of an asset-purchase plan designed to complement long-term loans and record low rates to kick-start the economy. In a blow to confidence, growth in the 18-nation region stalled in the second quarter, with unemployment stuck close to a record high, while inflation is running at a fraction of the ECB’s mandate.

“It’s a very weak recovery in the euro area and we have a bit of stop and go,” said Anatoli Annenkov, senior economist at Societe Generale SA in London. “There’s internal weakness in the euro area, and its worrisome to consumers and companies, who will hold with their decisions on hiring and capital investments. If you don’t have demand from the company side, growth isn’t taking off.”

Industrial confidence fell to minus 5.5 from minus 5.3, while construction sentiment increased to minus 27.7 from minus 28.4, according to today’s report. Sentiment in the services industry rose to 3.2 from 3.1 in August. Consumer confidence was at minus 11.4, matching a Sept. 22 preliminary reading.

‘Sharp Decline’

Draghi said last week that recent indicators gave no indication that the “sharp decline” in economic activity in the region had ceased. Bank lending continued to contract in August, and a gauge of euro-area manufacturing and services activity signaled growth in September was the weakest this year.

At the same time, inflation probably dropped to 0.3 percent this month, the lowest in almost five years, according to a separate survey. Eurostat will publish that report tomorrow. The ECB predicts it won’t reach 2 percent, the rate it defines as price stability, before 2017.

There’s “unanimous commitment” on the Governing Council to “use also other unconventional instruments within its mandate if it were to assess a worsening in the medium-term outlook for inflation,” Draghi told reporters in Vilnius on Sept. 25. The ECB announces its policy decision on Oct. 2.

According to Bloomberg News’s monthly survey of economists, 46 percent regard the standoff between Russia and Ukraine as the biggest threat to the euro area’s economic outlook.

The European Union and the U.S. have intensified sanctions against Russia this month, with earlier restrictions already taking their toll.

Munich-based MAN SE, Europe’s third-biggest truckmaker, is scaling back production by cutting hours for as many as 4,000 workers, partly because of a drop in demand in Russia.

Austria’s Raiffeisen Bank International AG (RBI), which owns the biggest foreign lender in Ukraine, said last week it expects a net annual loss of as much as 500 million euros ($ 634 million) after writing off most of its loan book in eastern Ukraine due to the conflict with separatists in the region.

To contact the reporter on this story: Catherine Bosley in Zurich at [email protected]

To contact the editors responsible for this story: Fergal O’Brien at [email protected] Jana Randow, Zoe Schneeweiss

Euro Under More Pressure As Russian Sanctions Are Implemented

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The euro looked set to finish the week near $ 1.28 as the dollar climbed ahead of the Federal Reserve’s upcoming policy meeting.

The common currency traded at $ 1.2922 at 10:00 GMT as the European Central Bank and the Fed continued to diverge.

Reuters reported that ECB Vice President Vitor Constancio admitted that the bank hasn’t ruled out a quantitative easing program, though it is a strategy they’d prefer not to employ.

The bank announced a second easing package at its policy meeting last week, but did not elect to buy up government debt and instead focused on increasing the flow of credit.

Related Link: Tips For Getting Risk Tolerance Right

Meanwhile, the US Federal Reserve is moving in the opposite direction as it continues to taper its own asset purchase program. With the bank’s policy meeting coming up next week, investors are speculating about whether or not the bank will provide markets with any clues about its rate hike timeline.

Fed Chair Janet Yellen has remained cautious about a rate hike, saying the bank will not make a move until it is absolutely certain that the US economy can stand on its own. However, she has also indicated that a sooner than expected rate hike could be a possibility if the labor market improves faster than expected.

The euro fell under more pressure on Thursday when it was announced that the EU was moving forward with its latest round of sanctions against Russia. A ceasefire agreement in Ukraine has ended much of the region’s violence for now, but Western leaders are still pushing Moscow to use its influence in order to find a peaceful solution for both sides.

See more from Benzinga

Euro Makes Modest Gains After Selloff

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The euro stabilized on Wednesday morning after a selloff took it down near $ 1.28 on Tuesday.

The currency traded at $ 1.2932 at 10:15 GMT as many worried about the state of the region’s economy.

Reuters reported that most investors are expecting to see the euro fall further in the weeks to come as the effects of a sanctions war with Russia become more prominent in economic data.

Sky high unemployment coupled with dangerously low inflation have also been weighing on the common currency, causing it to post weekly declines for the majority of the summer.

Related Link: Agribusiness ETFs Fight Summer Malaise

Meanwhile, the dollar headed in the opposite direction as speculation that the Federal Reserve could raise interest rates sooner than expected grew following a study from the San Francisco Fed. The research showed that markets’ predictions for the central bank’s rate increase may be too cautious, and that the bank could raise rates as early as next year.

Data from the U.S. has pointed to a continuing recovery, but the bank has been reluctant to commit to a firm timeline for a rate hike. Fed Chair Janet Yellen has said she is still worried about the labor market as recent data hasn’t been strong enough to indicate that it can stand on its own.

Moving forward, investors will likely keep an eye on the progressing situation in Ukraine where peace negotiations continue between Ukraine, the separatist groups and Russia to put a stop to the fighting.

Although the U.S. and the EU have prepared a new round of sanctions against Russia, they are holding off in hopes that the negotiations will result in a lasting peace agreement.

See more from Benzinga