News of fresh Russia sanctions could weigh on EUR - eFXnews

By FXstreet.com | Updated July 30, 2014 AAA

FXStreet (Łódź) - The eFXnews team indicate that in Morgan Stanley's opinion the news of new sanctions being imposed on Russia by th eEU could weigh on the EUR for three reasons.



Key quotes



"First, following a string of negative economic data surprises, Europe can ill-afford retaliatory trade measures from Russia, a key export destination."



"Second, increased geopolitical risk (and perhaps direct supply restrictions) may well increase natural gas and oil prices, placing an effective tax on European consumers."



"Finally, US restrictions on USD funding of certain Russian institutions will further raise the costs of funding in USD. To the extent that this leads to a transition of funding from USD into EUR, there will be marginal EUR weakness."



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