Euro and Russia Feel Sanction Sting

The euro was stuck near its lowest level since November and Russian markets tumbled for a third straight day on Monday as new European sanctions for Moscow chilled the already frosty relationship between the two.

The 28-nation European Union reached an outline agreement on Friday on its first economic sanctions on Russia. Its increasingly tough stance was underscored by German finance minister Wolfgang Schaeuble, who said the “top priority” was peace rather than economic interests.

Russia warned the moves would hamper cooperation between the two and undermine the fight against terrorism, although Foreign Minister Sergei Lavrov said on Monday that Moscow would not impose tit-for-tat measures.

Europe’s main bourses were flat in subdued trade as strong earnings updates and relief over Russia’s response, and that the EU measures had steered away from Russia’s gas industry, balanced concerns about the impact of the sanctions.

There was more acute pain for Moscow stocks, however, with their woes compounded by an international court ruling that Russia must pay shareholders in defunct oil producer Yukos $50 billion for expropriating assets. That would be a big hit for a country teetering on the brink of recession.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza