Following on from Monday’s market reaction to the situation in the Ukraine, where we saw the rouble lose significant ground despite the best efforts of the Russian central bank to support it, yesterday’s market movements were in stark contrast. After an injection of panic on Monday, worries were dampened as Russian President Vladimir Putin announced that there was no immediate need to send troops into Ukraine, and stated that the use of any force would be a ‘last resort’.
As a result, yesterday saw demand for safe-haven assets decrease, with the Japanese yen losing ground against all of its 16 most-traded peers. The Swiss franc also lost out, tumbling to year-long lows against its most-traded partner, the euro. With a bounce-back of commodity prices in response to the news, we saw the export-reliant Australian dollar take strength. The South African rand also performed well. Overnight last night we had growth figures out of Australia, and later today we have an interest rate decision from the Bank of Canada. Markets will also remain very susceptible to the geopolitical situation in Ukraine.
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