EUR/USD Sheds Weekly Gains Surrounding the 1.1100 Zones as Anxiety Intensifies Over Ukraine War

The Pressure Continues and Intensifies

The EUR/USD currency pair continued to be under intense pressure in the vicinity of 1.1085 while it printed a negative performance on the day in the course of the early European session, the first to be seen in five days. The pair could have got the transfer of their recent weakness from the renewed risk-off atmosphere in the markets as a result of heightened anxieties over the crisis in Eastern Europe.

There have been mixed signs coming from the series of negotiations aimed at getting a ceasefire between Russia and Ukraine. There are also unabated inflation fears trailing the crisis as the European Central Bank has warned of stagnant inflation in the past couple of days.

EUR/USD price chart. Source TradingView

Though it is said that diplomats from both sides of the divide – Russia and Ukraine – have decided to stick to the negotiation table with the aid of mediators who keep them together, Ankara’s intensified efforts to bring both Ukraine’s President Volodymyr Zelenskyy and his Russian counterpart, President Vladimir Putin face to face on the negotiation table is giving hopes to traders.

The US Instigates Chemical Weapon Fears

But on the flip side, the West’s warning that Russia might be using chemical weapons, and the readiness of China to offer needed support to Russia if called, has weighed a measure on the fears ravaging the financial market.

Elsewhere, the rapidly increasing price of oil renewed the much-feared woes attending to inflation. The oil market is beginning to have a tough time as a result of the Ukraine war and the US sanction banning the purchase of oil and gas from Russia for invading Ukraine. This also goes to influence the positive direction of inflation records from the Eurozone.

The final reading of the Eurozone’s top inflation figures on Thursday for the month of February went above the barriers initially forecasted. A lot of policymakers within the European Central Bank, including the President of the bank, Christine Lagarde, moved swiftly into a damage-control mode while they hurriedly attempted to control the associated fears in the market over the possibility of fast monetary policy fastening soon in the future.

It should be noted that a new spike in the COVID cases in China on a daily basis after a period of two days has now reduced from what was on record. The rising fears over China’s case joined fears of more Russian action in Ukraine to weigh heavily on the pair and market sentiments.