Exchange Rate Forecast: Riskier Currencies to go Higher as Putin says ‘No Need’ for Military Force
Tensions eased today over events in Ukraine after Russian President Vladimir Putin told a press conference that there is no immediate need to send Russian troops into the Eastern European country, adding that he would only send forces in an extreme case.
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Putin’s comments eased concerns that the crisis will not immediately escalate. As a result of the comments, riskier currencies such as the Indian Rupee, South African Rand and Turkish Lira – among others – all regained ground after sustaining heavy losses on Monday.
“We’re seeing something of a reversal of yesterday so stocks are higher and the moves in Dollar-Yen and Euro-Swiss are consistent with that. Russian military exercises’ are being completed for now. We remain susceptible to headline risk,” said a currency strategist.
Putin also eased concern by saying that ousted Ukrainian President Yanukovych has no political future in Ukraine and that Russia only helped him for humanitarian reasons. The words eased concerns that the former President could return to re-establish himself.
Putin also quashed the immediate threat of a war in the Crimean Peninsula, adding: “We will not go to war with the Ukrainian people.”
With tensions easing, both emerging market currencies and riskier currencies have rallied. The Hungarian Forint, Russian Ruble, and many others have recovered ground against the British Pound and US Dollar.