Markets closely monitoring tensions between Russia and Ukraine


The euro fell across the board on Monday as tensions flare in Eastern Europe between Russia and Ukraine. Investors are taking steps to position for a potential armed conflict in Ukraine which has seen the single currency weaken as a result.

The European Union depends on Russia for 40% of its gas imports and 30% of its oil imports, this explains the euro’s sensitivities to conflict in the region.

A war could significantly undermine the supply of oil and gas to Europe, thereby heaping economic pressures and encouraging the European Central Bank (ECB) to maintain monetary support for longer. The euro is likely to remain under pressure until an agreement is found between Russia and Ukraine.


The pound rallied against the euro but fell against the US dollar amidst a rise in investor anxiety linked to Russia-Ukraine tensions. However analysts say recent moves would reverse if a diplomatic solution is found that can ease tensions. With the euro weakening, this causes Sterling to reach one week highs against the single currency whilst safe-haven flows into the dollar caused cable to fall.

Key announcements

7:00 – GBP – Average earnings index 3m/y – Actual 4.3% from previous 4.2%
7:00 – GBP – Claimant count change – Actual -31.9k from previous -51.6k
7:00 – GBP – Unemployment rate – unchanged at 4.1%