The euro lost a full cent overnight after the US Federal Reserve meeting ended with investors worried that the bank would raise its key interest rate sooner than expected. The common currency traded at $1.3836 at 6:00 GMT on Thursday morning.
Reuters reported that US stocks and bonds slid while the dollar improved on Wednesday after Fed Chair Janet Yellen announced that the bank was planning to end its asset purchase program in the fall and may start to increase interest rates about six months later. The announcement came as a surprise for most who were expecting Yellen to take a less aggressive stance.
Despite the Fed's efforts to stress that its policy view hadn't changed and that it was still planning to wait a “considerable time” before tightening up the US' monetary policy, markets were skittish and investors shifted their bets.
Meanwhile, eurozone policymakers prepared to meet in Brussels later on Thursday where they will discuss the region's next steps in enacting economic sanctions on Russia. After Russia disregarded international concern and began the process of annexing Crimea this week, Western leaders have committed to punishing Moscow with sanctions designed to isolate the nation economically.
However in the eurozone, where most nations are reliant on Russia for natural gas supplies, the decision about how to sanction Moscow will not be an easy one. So far, eurozone leaders have had trouble agreeing on how the impact of the sanctions should be shared across the bloc.
Although all of the region's policy makers agree there is a need for tougher sanctions, they are finding it difficult to agree on how to move forward without some nations feeling the economic strain more than others.
BY Laura Brodbeck