The euro is falling and will continue to fall
First we discern the caution side; several central banks chose the status quo of monetary policy last week, such as the central bank of Malaysia or the ECB. The meeting of the European Central Bank on Thursday should not be an event.
On the other hand, there is a fearless camp, including the Bank of Canada (BoC). As expected, The Bank of Canada raised its key rate by 25 basis points to 0.50% last week; and further increases are expected to fight inflationary pressures.
Finally, The US Federal Reserve (Fed) is halfway. Its president, George Powell, called for keeping key rate increases in March during congressional hearings that are held every two years. He said he "tends to support a 25 basis point increase." The possibility of a larger rate hike, in the order of 50 basis points, is now a thing of the past.
It is difficult to assess the macroeconomic consequences of this conflict. According to the Rexecode Institute, economic growth in France could fall by 0.8 points this year (+3.2% of GDP compared to the government's initial forecast of 4%). Some banks are talking about the possibility of a recession this year for the eurozone.
The only certainty is that the longer the war lasts, the greater the destruction of the economy will be in terms of maritime transport, raw materials (energy, agricultural products) and financial markets in general.
In a few days, we have moved from the exit from the post-COVID crisis, which was announced on the positive side (with the exception of the problem of inflation), to a new crisis, geopolitical, with global consequences.