Draghi Downplays The Link Between Ukraine And Eurozone Ahead Of ECB Meeting

The euro remained above $1.37 on Tuesday morning as investors watched the situation in Ukraine carefully for further details. After Russian President Vladimir Putin announced his right to use military force in order to protect Russian interests within Ukraine, global financial markets took a downward turn and commodity prices soared. The euro traded at $1.3753 at 5:30 GMT as investors wondered how the tension would affect the European Central Bank's upcoming policy meeting. Related: #PreMarket Primer: Tuesday, March 4: US Takes Steps To Limit Putin's Forces In his testimony to the European parliament on Monday, ECB President Mario Draghi stressed that the direct economic link between Ukraine and the eurozone was limited; however he did say that the bank was going to keep an eye on any new developments. The Wall Street Journal reported that Draghi gave no indication as to whether the bank would take the crisis in Ukraine into account on Thursday when the region's central bankers meet to discuss the region's monetary policy. Most are expecting the bank to either lower interest rates or use unconventional policy changes in order to inject funds into the eurozone banking system. Draghi avoided commenting on the ECB's plans for the meeting, saying the bank adheres to a blackout period which prevents central bankers from commenting on policy within the week leading up to the meeting. Recent data showed that eurozone inflation had steadied at 0.8 percent in January and February, still far below the bank's two percent target. Many are worried that the eurozone could find itself in a period of deflation if the ECB doesn't step in to prevent inflation from tumbling further.