29 Apr 2014
RUB firmer despite sanctions - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, noted the bullish momentum in the RUB after the announcement of US sanctions.
Key Quotes
"The G10 foreign exchange rates have continued to remain very stable during the Asian trading session. The announcement yesterday of fresh sanctions against Russia has only a limited impact on broader financial market conditions."
"The Russian rouble and Russian equity market even staged a relief rally after the sanctions were announced perhaps reflected an easing of some concerns amongst investors that the sanctions could have been more biting for the Russian economy. The Unites States added seven more individuals and seventeen non-public Russian companies, who are closely linked to President Putin’s inner circle, to the sanctioned list."
"It includes imposing sanctions on three banks. The United States will also deny export licenses applications and revoke existing licences for any high-technology items that could contribute to Russian military capabilities."
"The EU also announced that it has added a further fifteen individuals who will now be subject to asset freezes and travel restrictions. The new sanctions represent a further step up directly targeting companies and restricting exports."
"The risk of more material economic sanctions being imposed on Russia continues to increase which could push the Russian economy into recession and potentially trigger more material retaliatory action. However, investors continue to remain comfortable that the negative fallout on global growth from developments in the Ukraine remains modest so far leading to only a limited on broader financial market conditions. Declining volatility in the foreign exchange is proving supportive for carry trades although even high yielding currencies have lost upward momentum during April."
Key Quotes
"The G10 foreign exchange rates have continued to remain very stable during the Asian trading session. The announcement yesterday of fresh sanctions against Russia has only a limited impact on broader financial market conditions."
"The Russian rouble and Russian equity market even staged a relief rally after the sanctions were announced perhaps reflected an easing of some concerns amongst investors that the sanctions could have been more biting for the Russian economy. The Unites States added seven more individuals and seventeen non-public Russian companies, who are closely linked to President Putin’s inner circle, to the sanctioned list."
"It includes imposing sanctions on three banks. The United States will also deny export licenses applications and revoke existing licences for any high-technology items that could contribute to Russian military capabilities."
"The EU also announced that it has added a further fifteen individuals who will now be subject to asset freezes and travel restrictions. The new sanctions represent a further step up directly targeting companies and restricting exports."
"The risk of more material economic sanctions being imposed on Russia continues to increase which could push the Russian economy into recession and potentially trigger more material retaliatory action. However, investors continue to remain comfortable that the negative fallout on global growth from developments in the Ukraine remains modest so far leading to only a limited on broader financial market conditions. Declining volatility in the foreign exchange is proving supportive for carry trades although even high yielding currencies have lost upward momentum during April."