Forex News – EU finance ministers meet to discuss sanctions on Russia, markets hold breath
March 17, 2014 10:15 am
There has been a subdued start to the new trading week, despite headlines over the weekend that Crimea voted in a referendum to join the Russian Federation. Markets were mixed in Asia on Monday but foreign exchange markets were remarkably calm going into the European session.
The usual gauge of risk aversion in forex is a strengthening of the safe haven yen. However the yen only briefly gained and the dollar rose towards the upper range of 101 yen.
The preliminary vote count shows that more than 95% of the voters backed a move to annex Crimea to the Russian Federation. The Crimean parliament has begun preparations for the official annexation legislation. A Crimean parliamentary delegation was expected to arrive in Moscow on Monday to discuss the procedures required for Crimea to become part of the Russian Federation.
The European Union and the United States have already announced that they will not recognise the results of the referendum. Markets will likely wait to see if any economic sanctions will be imposed on Russia. An immediate move by the West will involve a freeze on assets of Russian officials.
The greater medium-term risk will likely be a wider push by Russia into the east of Ukraine. Such a move would trigger a much stronger set of international sanctions and intervention .Such an event will cause more volatility in the markets.
The euro is holding steady against the dollar as markets look ahead to a meeting of European Union foreign ministers in Brussels today. It is expected the ministers will plan on sanctions such as freezing assets of Russian officials and ban travel of certain Russians within the EU.
So far there have not been any signs for imposing economic sanctions just yet. The EU ministers will likely debate a range of additional measures that can be taken when EU leaders meet for a summit on March 20-21. Alot will also depend on Russian President Putin’s moves and whether he will go ahead and annex Crimea.
There has been a subdued start to the new trading week, despite headlines over the weekend that Crimea voted in a referendum to join the Russian Federation. Markets were mixed in Asia on Monday but foreign exchange markets were remarkably calm going into the European session.
The usual gauge of risk aversion in forex is a strengthening of the safe haven yen. However the yen only briefly gained and the dollar rose towards the upper range of 101 yen.
The preliminary vote count shows that more than 95% of the voters backed a move to annex Crimea to the Russian Federation. The Crimean parliament has begun preparations for the official annexation legislation. A Crimean parliamentary delegation was expected to arrive in Moscow on Monday to discuss the procedures required for Crimea to become part of the Russian Federation.
The European Union and the United States have already announced that they will not recognise the results of the referendum. Markets will likely wait to see if any economic sanctions will be imposed on Russia. An immediate move by the West will involve a freeze on assets of Russian officials.
The greater medium-term risk will likely be a wider push by Russia into the east of Ukraine. Such a move would trigger a much stronger set of international sanctions and intervention .Such an event will cause more volatility in the markets.
The euro is holding steady against the dollar as markets look ahead to a meeting of European Union foreign ministers in Brussels today. It is expected the ministers will plan on sanctions such as freezing assets of Russian officials and ban travel of certain Russians within the EU.
So far there have not been any signs for imposing economic sanctions just yet. The EU ministers will likely debate a range of additional measures that can be taken when EU leaders meet for a summit on March 20-21. Alot will also depend on Russian President Putin’s moves and whether he will go ahead and annex Crimea.
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