Early this week markets were affected by the reignited tensions in Ukraine. Reports out of the EU suggested economic sanctions on Russia were imminent; as a result, we saw investor demand for safe haven currencies increase, with uncertainty in the markets steering traders away from riskier assets. This pushed up the Japanese yen and the Swiss franc, and conversely meant that we saw emerging-market currencies perform badly. The Russian rouble also struggled, as one would expect under such circumstances.
Yesterday, however, we saw the markets seesaw following the release of Chinese growth figures, which came in better than analysts had forecast. As the world’s second largest economy and a major export destination for a number of countries, the impact of the figures were felt by a number of currencies. The Japanese yen eradicated the gains it had achieved at the start of the week as demand for safe-havens dampened, and the Australian dollar took strength from the news, given that it is an export-reliant, commodity-backed economy.
Looking forward to today we have a relatively quiet day on the data-front, with the only major data release being inflation figures out of Canada.
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