Dollar climbs as Ukraine crisis escalates
The Russian President, Vladimir Putin, signed a decree on Monday recognising the independence of the two separatist regions Donetsk and Luhansk in eastern Ukraine. Immediately afterward he ordered Russian troops into these regions, in a ‘peacekeeping’ mission as he declared, violating Ukraine’s sovereignty. To get more news about
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On Thursday, Russian forces launched a full-scale invasion of Ukraine, with Russian missiles raining down on Ukrainian cities, and explosions were heard even in Kyiv. The attack was wide-ranged, taking place by land, air, and sea, and was reported as the biggest attack by one state against another in Europe since World War II. Dozens were reportedly killed in Ukraine, including civilians, in an assault that the Russian President has described as a “special military operation”.
Chief of NATO Jens Stoltenberg, stated that Russia’s “brutal act of war” shattered peace in Europe, and NATO has positioned additional US troops to the Baltic nations bordering Russia. Leaders across the world have condemned Russia’s actions and are moving towards imposing severe sanctions against Russia. Australia, Canada, and Japan have announced sanctions against Russia, targeting Russian banks and oligarchs. Britain has moved to sanction Russian individuals and banking institutions in the UK and the UK PM Boris Johnson vowed on Thursday to impose massive sanctions against Russia and even stated that Vladimir Putin may face charges for war crimes.
The US President, Joe Biden, announced on Tuesday the "first tranche" of measures against Russia, which aim to deliver a hard blow on the country’s economy, including sanctions on Russia's sovereign debt so that the country can no longer raise money for its state financing. Biden, speaking from the White House on Thursday, unveiled harsh new sanctions against Russia that would "impose a severe cost on the Russian economy, both immediately and over time."
The EU foreign policy chief Josep Borrell stated that EU members states have unanimously agreed upon a package of new sanctions against Russia. More importantly, Germany has suspended the approval of the Nord Stream 2 pipeline, a move that may cause an energy crisis in Europe, which depends on Russia for approximately 40% of its gas and send the prices of energy-related assets even higher.
The EU has announced further sanctions, targeting Russia’s defense minister and military chiefs and imposing visa bans and freezing assets of high-ranking Russian officials. European Commission chief Ursula von der Leyen stated that the EU is planning new sanctions against Russia, that will target strategic sectors of the Russian economy, blocking access to technologies and markets and crippling it's economy.
Russia has threatened to retaliate against EU sanctions, and it is likely that the EU, which relies on Russia for key imports, will pay a heavy price. The price of gold, oil, and other key commodities such as corn and wheat is already climbing and prices are expected to climb further as the crisis unfolds, contributing to rising inflation rates in the Eurozone.
Safe-haven currencies, such as the dollar and the Yen, have climbed the past few days, as the crisis that has been brewing for months between Russia and Ukraine escalates. The Russian stock market and the Rubble have plummeted to historic lows, in the wake of the invasion of Ukraine. Global stock markets crashed to multi-month lows early on Thursday, but recovered later in the day, as markets absorbed news of the escalation of the crisis in Ukraine.
