Euro Steady as Ukraine Unrest Ebbs, Dollar Eyes Data

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February 24, 2014 3:14 PM EST

The euro held steady against the dollar on Monday, retaining its gains made late last week as political unrest in Ukraine showed signs of settling down for the time being.


The House of Lords will question Patrick Pearson who is Director of Financial Markets at the European Commission about shadow banking sector in the eurozone (Reuters)

After a week of fighting in the streets of the capital, Ukraine's parliament voted on Saturday to remove President Viktor Yanukovich and also freed his arch-nemesis, former prime minister Yulia Tymoshenko, completing a radical transformation in the former Soviet republic.

The euro stood little changed on the day at $1.3735, having pulled away from last week's low of $1.3685.

The euro traded at 140.82 yen after going as low as 139.22 yen on Thursday.

"Whether currencies draw stability from the situation in Ukraine depends on whether the country can swiftly put together a national government, demonstrations cease, and the European Union or the International Monetary Fund can provide funds to make up for frozen Russian aid," Masafumi Yamamoto, chief strategist at Praevidentia Securities, wrote in a note to clients.

The dollar edged up 0.1 percent to 102.57 yen, hovering near a three-week high above 102.80 hit on Friday.

Against a basket of major currencies, the dollar gained 0.1 percent to 80.288 .DXY.

Last week the dollar index posted its first weekly gain in three weeks, largely on minutes from the Federal Reserve's January policy meeting showing that the U.S. central bank's plan to reduce its monthly asset purchases remained intact.

Market participants will be monitoring if the Fed's tapering commitment can offset any weakness in U.S. economic indicators due this week.

"What was agreed at the G20 meeting, such as setting a 2 percent global growth target, will be forgotten immediately. But tacit approval by other G20 nations for U.S. tapering gives the dollar some support while weighing on emerging currencies," said Yunosuke Ikeda, forex strategist at Nomura Securities.

U.S. data out this week includes consumer confidence on Tuesday, new home sales on Wednesday and fourth-quarter gross domestic product on Friday.

At the Group of 20 meeting of finance ministers and central bank chiefs held over the weekend in Sydney, the participating nations set a collective GDP growth target of 2 percent over the next five years.

Global growth and recent turmoil in emerging markets were in focus at the meeting, but the G20 communiqué did not hint towards significant friction between advanced and emerging economies.

The Australian dollar shed 0.4 percent to $0.8948, still on shaky footing after taking a battering from a lackluster Chinese manufacturing survey last week.

(Photo: / )
The House of Lords will question Patrick Pearson who is Director of Financial Markets at the European Commission about shadow banking sector in the eurozone (Reuters)
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