We saw the Russia-Ukraine situation as a major driver behind global market movements throughout the day yesterday. As one would expect, we saw the Russian rouble decline, hitting record lows against sterling. Despite the unexpected decision to hike interest rates by 1.5%, as well as the Central Bank selling $10 billion in an attempt to shore up the currency, global demand for Russian assets dried up, and hence we saw the rouble lose ground. The impact of the situation was felt further afield, as global appetite for risk decreased and traders looked to buy-in to safer assets. As a result we saw the traditionally safe-haven Japanese yen and Swiss franc perform well. Traders will be keeping a close eye on the situation, and we could see a sell-off of commodity-back currencies like the Australian dollar and South African rand over coming days should the Ukrainian situation worsen.
Elsewhere, we saw the Norwegian krone and Swedish krona lose ground as manufacturing data out of both countries came in worse than forecast. A quiet day on the data front means that markets will be particularly susceptible to the situation in the Ukraine.
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