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54.76% of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Important Notice - Fraud awareness
Important Notice - Scam alert
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 54.76% of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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EURUSD sinks as Russia receives new sanctions - US imposes SWIFT Ban

EURUSD has commenced the week with an accelerated weakness. Shedding off further to the downside ahead of the new sanctions placed on Russia by the Western powers as a punishment for invading Ukraine. The United States Acts in Tandem with Partners and Allies to Maximize Consequences for Russia. In Show of Unity Against Invasion of a Sovereign State, the United States had recently placed a partial ban on Russia's use of the SWIFT bank correspondence system. This means the Russian banks and citizens can no longer send and receive money across the globe. Thus Top Ten Russian Financial Institutions are now Under U.S. Restrictions and can no longer function globally. This ban was further accompanied by a far greater one involving a threat by the U.S. to freeze the reserve assets of the Central Bank of Russia, costing a total of $650 billion.

Effects of the Ban

These actions dramatically disrupt Russia's access to the global financial system, disabling the CBR from defending the free-falling Ruble as well as cutting off the government from cross-border purchases and financing. Also, Russia's credit rating was promptly cut to junk.

Similarly, the bans placed on Russia targets two of Russia's Largest Financial Institutions, such as Public Joint Stock Company Sberbank of Russia (Sberbank) and VTB Bank Public Joint Stock Company (VTB Bank). This ban no doubt drastically alters their fundamental ability to operate.

Remarkably, Russian financial institutions have been known to conduct over $45 billion worth of foreign exchange transactions globally, of which 80 percent are in U.S. dollars. The vast majority of those transactions will now be disrupted.

These actions undoubtedly have been designed to weaken the Russian economy, stifling their significant economic engagement and isolating Russia from all international transactions.

EURUSD Forecast

EURUSD retested its annual lows last week following the increasing unrest between Russia and Ukraine and recent severe sanctions. The pair has started the week seeking to maintain the support at $1.11770, but this was hardly possible as it already broke below it. Euro will likely continue on this downward trend for the next few days.

On the other hand, the bears might have to concede to the bulls any time soon, wildly, if the recently proposed peaceful talks between Russia and Ukraine succeed this week in Belarus. Of course, the Russian president had set its military at the highest offensive attack at any slight harsh utterance and seizure from Ukraine during this meeting.

Last Updated: 28/02/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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