FX Week 2 March 2014

Political risk keeps safe havens favoured


The new week will begin against the backdrop of heightened political risk in eastern Europe, with tensions between Ukraine and Russia running very high. Clearly the risk of war between Ukraine and Russia is not insignificant, with both countries mobilizing troops over the weekend, which is likely to keep safe haven currencies such as the JPY and the CHF supported in the first instance. The USD would ordinarily be a beneficiary of such tensions as well, although with relations between Russia and the US also being tested over the crisis, the USD may not be the preferred choice on this occasion, at least not initially.

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