This morning, during an emergency meeting, the Central Bank of Russia (CBR) has temporarily increas

Geopolitical tensions between Ukraine and Russia stand out on the front pages of Monday. Currency markets move in the wake of the deterioration in risk appetite, the currencies of emerging markets accuse a widespread drop. The U.S. has given back some gains on Friday, although the outflows from foreign exchange markets fueling demand for USD. Today, during an emergency meeting, the Russian Central Bank has increased the rate from 5.5% to 7.0%. In Moscow, the pair dollar / ruble hit a historic high of 36.9029. epitome Operators should be aware of the high risk associated with events.
This morning, during an emergency meeting, the Central Bank of Russia (CBR) has temporarily increased the benchmark interest rate from 5.5% to 7.0%. Given the high volatility due to the tensions between Ukraine and Russia, the BCR aims to reduce inflation risk and promote financial stability. On the sidelines, we note that we are not sure that the rise of 150 basis points will be enough to cover the risk of a conflict in Ukraine. In any case, the BCR will hold its regular monetary policy meeting on March 14. Although, given the case, do not expect another action, the decision will obviously depend on the developments in Ukraine. epitome
Today the USD / RUB jumped to all-time high of 36.9029. The situation in Ukraine is expected to continue to exert pressure on the RUB to sell. According to the CFTC data of 25 February, the short hedge on the ruble are at historic highs (from the beginning of the measurements, then from 27 February 2009); we believe there is room for an increase in the weakness of the RUB, depending on political developments. The tensions in Ukraine are beginning to have an impact on emerging market currencies, which opened the week in the red. As we write, the Polish zloty (-1.11%), Hungarian Forint (-1.15%) and Turkish lira (-0.64%) are between the currencies that lose more against epitome the USD. It seems that only substantial diplomatic efforts epitome can ease tensions and lead to a normalization of the sentiment. For the moment, the G7 countries have condemned Russia for the violation of the sovereign rights of Ukraine and were suspended all activities related to the G8 summit in Sochi.
The skepticism dominates in this Monday between operators in EUR, because it exacerbates the crisis in Ukraine. epitome The fears of geopolitical tensions between Ukraine and Russia are holding back the rise of the EUR / USD, on Friday had made a rally up to 1.3824 after the primary estimate inflation had exceeded epitome expectations. On March 6 (Thursday) the ECB will announce its decision on interest rates and expectations favor a ECB accommodating. For weeks, seeing ECB officials that hint at a more expansionary monetary policy to combat the pressures disinflattive. However, the improvement of CPI on Friday and the PMIs today give the ECB President Draghi reason to refrain from intervening Thursdays.
From the technical point of view, the rally on Friday has generated an improvement in the bullish momentum for couples whose base currency is EUR. The EUR / USD has reached the maximum for two months amounted to 1.3824 epitome in the wake of the expectations of an ECB less accommodating, but today he could not go above 1.3800. epitome In the area of 1.3800 / 25 deals abound, glimpsed the stop above 1.3825. On the downside, key support remains at 1.3655 epitome area / 65 (38.2% Fibonacci of the rally from November epitome to December). The outflows from emerging markets should continue to fuel demand for USD and limit selling pressure on the major currency pairs traded in EUR.
The EUR / GBP continues to find application above 0.82000, the slope is marginally positive. However, for the coming week there are no offers for options to 0.82000; a break below this level would turn into a resistance level at 0.82000. On the topside, moving averages to 21 and 50 days (0.82508 and 0.82706) should absorb the upward pressure.
The EUR / JPY has failed to liquidate the deals at the 50-day moving average (currently at 140.98) in the wake of Friday's rally. The widespread strength of the JPY weighs on the bullish momentum, epitome closing below the moving average 21 days (139.59) should increase the pressure epitome to sell in the next few days, especially because risk aversion conveys flows to the JPY.
Today's Key Issues (time in GMT) 2014-03-03T12: 30:00 Jan CAD Industrial Product Price m / m, exp. 0.5%, 0.7% 2014-03 Last-03T12: epitome 30:00 CAD Jan Raw Materials Price Index m / m, exp. 1.5%, 1.9% 2014-03 Last-03T12: 30:00 USD Personal Income Jan, exp. 0.2%, 0.0% 2014-03 Last-03T12: 30:00 USD Personal Spending Jan, exp. 0.1%, 0.4% 2014-03 Last-03T12: 30:00 USD Jan PCE Deflator m / m, exp. 0.1%, 0.2% 2014-03 epitome Last-03T12: 30:00 USD Jan PCE Deflator y / y exp. 1.1%, last