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Ukraine and Crimea Tensions Hit Euro, Eastern Europe

Posted by Joseph Trevisani on Feb 26, 2014 11:50:00 AM

The fluid political situation in Ukraine with fears of separatism in the eastern half of the country and the Crimea and a Russian military alert stoked a flight from the euro to the dollar and from Eastern European currencies to the dollar and the euro. The euro/yen sold-off as well.

The trigger was a news report that the Russian military was conducting combat readiness tests with troops on the northern border of the Ukraine. The euro dropped from around 1.3740 and a high of 1.3757 to 1.3720 and then to 1.3664 in the first two and a half hours or New York trading. The eur/yen sank from 140.56, high 140.79 initially to 140.40 and then to a low of 130.65 before recovering to 139.80.

The Russian Ruble dropped to 36.0563, a five year low against the dollar, from 35.7163. Versus the euro the Russian currency fell to an all-time low of 49.4961 from 49.0844 before stabilizing around 49.2040.

The Polish Zloty slipped to 3.0533 against the dollar from 3.0188. It is far from the all-time low of 4.7420 that came in October 2000. Opposed to the euro the Zloty skidded as low as 4.1742 from 4.1493. It is currently at 4.1710. The historical low came in February 2009 at 4.9307.

The Ukrainian Hryvina tumbled to10.5000 against the dollar from 9.1767 in extremely volatile and illiquid action and all-time low. Against the euro it traded down to 14.0325 from 12.6103 also a record low.

The Hungarian Forint moved as low as 227.43 versus the dollar from 224.51. The historical low is 300.36 from October 2000.  The Forint plummeted to 310.94 against the euro from 308.50, the record being 324.24 on January 31, 2012.

The Romanian Leu reached 3.3072 against the dollar in New York trading from 3.2699. The record is 3.8462 on July 31, 2012.  The Leu sank to 4.5329 against the euro from 4.4730. The record is 4.6509 also on July 31, 2012.

Joseph Trevisani

Chief Market Strategist

WorldWideMarkets Online Trading

Charts: Alpha Trader,  Bloomberg

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ScreenHunter 2149 Feb. 26 11.42

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