The euro has strengthened slightly this morning despite growing tensions between Russia and Ukraine.
Growing concerns over an imminent Russian invasion of Ukraine caused oil prices to hit a 7-year high yesterday. Russia supplies Europe with a third of its natural gas, so any invasion could put significant pressure on already-high energy prices. This could lead the European Central Bank to maintain its monetary policy for longer.
President of the ECB Christine Lagarde spoke yesterday afternoon regarding inflation but maintained a dovish stance. She reiterated that the Bank will act when appropriate with a gradual approach.
Later today, data for the German ZEW economic sentiment index will be released. With Germany being the eurozone’s largest economy, these figures will give an indication of how member countries are faring.
