Putin’s Comments Put Risk Back on the FX Table

New Zealand’s dollar led gains among major currencies as investor risk appetite rose after President Vladimir Putin said Russia isn’t seeking to split Ukraine further after annexing its Crimea region.

The euro fell as an industry report showed German investor confidence dropped to the lowest since August. The yen pared gains versus the euro and stocks rose. Thailand’s baht rose to a three-month high after the Cabinet approved lifting a state of emergency, while China’s yuan had the biggest three-day loss since at least 2007 amid concern financial risk is increasing.

Putin’s statement suggests Russia’s interest in Crimea “doesn’t mean they’re going to move to other parts of Ukraine,” Michael Sneyd, a currency strategist at BNP Paribas SA in London, said in a phone interview. “The comments have provided the market some relief. It’s the clearest in Aussie, kiwi, and the Canadian dollar, the high-beta currencies.”

The kiwi, as New Zealand’s dollar is known, climbed 0.6 percent to 86.16 U.S. cents at 10:18 a.m. in New York and touched 86.23, the highest level since April 12. Australia’s dollar, nicknamed the Aussie, gained 0.4 percent to 91.27 U.S. cents, while South Africa’s rand climbed 0.5 percent to 10.7266 against its U.S. counterpart. Canada’s dollar advanced as much as 0.2 percent before trading little changed at C$1.1054 per U.S. dollar.

via Bloomberg

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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