The Euro to US Dollar (EUR/USD) exchange rate softened on Tuesday as concerns over a possible Eurozone exit by Greece persisted and as pro-Russian rebels launched a new offensive ahead of peace talks.
Rebel armour and fighters launched an assault on a strategically important transport hub in eastern Ukraine as they try to gain as much ground as possible ahead of peace talks due to be held on Wednesday. Fighting also increased as the pro-Kiev Ukrainian military mounted a counter attack against rebel positions close to and around the coastal city of Mariupol.
Leaders from Russia, Ukraine, Germany and France are set to hold a peace summit in Minsk tomorrow to try to negotiate a ceasefire to end the conflict, which has claimed the lives of thousands.
‘All-out war’
Concerns over an escalation in the conflict are high, as the USA has not ruled out the possibility of providing weapons to the Ukrainian army. A close ally of Russian President Vladimir Putin has warned that ‘all-out war’ could result if Washington does arm Kiev.
Washington and the EU have accused Russia of sending troops and equipment to aid the rebels.
‘First they sent weapons, and then they sent military advisors, then troops to protect military advisers, then troops to fight the Vietnamese. Arming is an extremely dangerous path and there are a lot of people in the US who still want to fight everywhere,’ said Russian MP Alexei Pushkov in an address to 100 members of the European Parliament.
President Obama said on Monday he would wait for the results of key peace negotiations in Minsk on Wednesday before taking any further measures.
Greece in Focus
Also spooking investors is the situation in Greece. The European Union is hoping to clinch an interim debt deal with Greece at next Monday’s Eurozone finance ministers meeting.
‘These are the next steps but for the time being we have low expectations that any final agreement will be tomorrow or at the European Council,’ said a European Commission spokesperson.
There are low expectations that such a deal will be struck however, as Greek Prime Minister Tsipras said that, he would not go back on pre-election pledges to end austerity.
Despite the lack of market moving economic data released from the USA today the ‘Greenback’ is forecast to make further gains as sentiment is set to remain under pressure.
Euro Exchange Rates:
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