FXStreet (Córdoba) - Lutz Karpowitz, analyst at Commerzbank, thinks that if economic tensions between Russia and the western world escalate further, this would have an increasing effect on the FX market.

Key Quotes

“Should economic tensions between Russia and the western world escalate further, this would have an increasing effect on the FX market too”.

“The USD will profit in relation to the EUR as the USA would be much less affected economically”.

“One victim would be the euro, which would be likely to fall against the dollar; Europe’s
trading connections with Russia are much tighter than the USA’s. Germany in particular is reliant on substantial energy supplies from Russia. Consequently, a trade war with Russia would hit the European economy much harder than the USA, especially as much stronger third-market effects would be likely for the euro zone. Indeed, should Russia slide into serious recession, many Eastern European trading partners would be affected. What’s more, European firms deliver much more goods than their US competitors to these countries”.

“The biggest loser will be the rouble; the sanctions issued by Russia itself will also harm the country’s own currency”.

Related Articles
  1. Forex Education

    Four Currencies Under the Spotlight in 2016

    With currencies having become the “tail that wags the dog,” in terms of their impact on the global economy, these four currencies will be under the spotlight in 2016.
  2. Forex Fundamentals

    These Currencies Are The Biggest Losers Of The Stock Downturn

    Here’s a list of the hardest-hit currencies amid the global stock market mayhem.
  3. Forex Strategies

    Will the Euro Continue to Rally? (EUO)

    The euro is rallying. Should investors chase this performance or is the real opportunity on the other side of the trade?
  4. Investing News

    China’s Forex Reserves Dropped Significantly

    China’s forex​ reserves dropped by a record $93.9 billion at the end of August to $3.56 trillion because the Central Bank has been selling dollars to provide a cushion to the falling yuan​
  5. Forex

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  6. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  7. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  8. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  9. Investing

    Financial News Comparison: Bloomberg Vs. Reuters (BAC, GOOG)

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  10. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
COMPANIES IN THIS ARTICLE
Trading Center