How does the Crimea situation impact on currencies?
All eyes are on the continuing developments in the Balkan region of the world.
As was expected, the so-called referendum in Crimea is said to have reported that ninety-seven per cent of ethnic Russians wish to secede from Ukraine and join the Russian Federation.
This has caused a massive ripple effect in the currency markets as of late. With both the European Union and the United States threatening very real sanctions, currency traders are already closely watching the value of the ruble in relation to its other major currency counterparts.
The Impact of Sanctions
For those who are taking a conservative stance in the world of Forex trading, there is likely to be a good amount of trepidation in regards to the short-term value of the ruble in the Russian economy. Indeed, Russian stocks have plummeted to four-year lows over the fresh unrest throughout the region. Perhaps more importantly, some are concerned that if Vladimir Putin indeed decides to invade Ukraine, further volatility and a host of new sanctions may be imposed.
Smoke and Mirrors?
However, it is interesting to note that the ruble rallied early in the week on signals that it will be adopted as the Crimean currency. Furthermore, the snap reactions to sanctions seem to have taken on a rather muted feeling. In simpler terms, many feel that any economic and political sanctions will have little long-term effect on the value of the ruble.
So, there are some online Forex trading analysts that will be taking a markedly bullish stance in the coming weeks. This may very well be a signal to take up short-term options. However, the crisis is still unpredictable and with the threat of military intervention still not completely off of the agenda, these values will need to be watched carefully.
