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5 Mar 2014
EMEA EM Express: Ukraine crisis weighs on central and eastern Europe economies
FXStreet (Łódź) - The European session was dominated by news on the Ukraine crisis, with various international officials holding talks with Russia on the developments in Crimea and the European Commission, in cooperation with the IMF, announcing an aid package of approximately 11 billion euros for the distressed country.
“I think everybody knows what is at stake here: For the first time in many years, we in Europe feel a real threat to our stability, and even to peace on this continent,” European Commission head Jose Manuel Barroso said announcing the aid program. “the situation in Ukraine is a test of our capability and resolve to stabilise our neighbourhood.”
Meanwhile, as widely expected, the Polish central bank kept rates unchanged at its March monetary policy meeting, in the face of a continuing and a moderate pick up in inflation.
In the opinion of the BBH Global Currency Strategy Team “Many on the board feel a rate hike by mid-year is appropriate, but we think it will come later in the year, if at all. The Polish economy has some exposure to Ukraine, and so there may be some headwinds ahead that argue for tightening later rather than sooner.”
Economic data
Yesterday the Hungarian year-over-year Retail Sales data revealed a 3.9% increase in January, considerably above the 1.8% rise registered the previous month and beating expectations of a 2.4% growth.
Technicals
Eastern European stocks and currencies are rebounding, as fears of a full-blown Russian intervention in Ukraine's Crimea have eased.
The daily FXStreet Trend Index for USD/RUB is strongly bullish, with the OB/OS Index neutral. RSI was expanding at 65.5075 at the last close, and has headed lower to 33.0227 so far today. Daily 2-StDev Volatility Bandwidth is expanding at 5426 pips, with ATR (14) at 4350 pips. The 1D 200 SMA is at 33.0556, while the 1D 20 EMA is neutral at 35.5178.
The USD/UAH daily FXStreet Trend Index is slightly bullish, with the OB/OS Index neutral. Daily 2-StDev Volatility Bandwidth is expanding at 5294 pips, with ATR (14) at 2515 pips.
The daily USD/PLN FXStreet Trend Index also is slightly bullish, with the OB/OS Index neutral. RSI was neutral at 49.1554 at yesterday's close. Daily 2-StDev Volatility Bandwidth is shrinking at 221 pips, with ATR (14) expanding at 329 pips. The 1D 200 SMA is at 3.1340, while the 1D 20 EMA is neutral at 3.0475 .
Additionally, the BBH Global Currency Strategy Team see EUR/PLN support near 4.15 and resistance near 4.20 and then 4.25.
“I think everybody knows what is at stake here: For the first time in many years, we in Europe feel a real threat to our stability, and even to peace on this continent,” European Commission head Jose Manuel Barroso said announcing the aid program. “the situation in Ukraine is a test of our capability and resolve to stabilise our neighbourhood.”
Meanwhile, as widely expected, the Polish central bank kept rates unchanged at its March monetary policy meeting, in the face of a continuing and a moderate pick up in inflation.
In the opinion of the BBH Global Currency Strategy Team “Many on the board feel a rate hike by mid-year is appropriate, but we think it will come later in the year, if at all. The Polish economy has some exposure to Ukraine, and so there may be some headwinds ahead that argue for tightening later rather than sooner.”
Economic data
Yesterday the Hungarian year-over-year Retail Sales data revealed a 3.9% increase in January, considerably above the 1.8% rise registered the previous month and beating expectations of a 2.4% growth.
Technicals
Eastern European stocks and currencies are rebounding, as fears of a full-blown Russian intervention in Ukraine's Crimea have eased.
The daily FXStreet Trend Index for USD/RUB is strongly bullish, with the OB/OS Index neutral. RSI was expanding at 65.5075 at the last close, and has headed lower to 33.0227 so far today. Daily 2-StDev Volatility Bandwidth is expanding at 5426 pips, with ATR (14) at 4350 pips. The 1D 200 SMA is at 33.0556, while the 1D 20 EMA is neutral at 35.5178.
The USD/UAH daily FXStreet Trend Index is slightly bullish, with the OB/OS Index neutral. Daily 2-StDev Volatility Bandwidth is expanding at 5294 pips, with ATR (14) at 2515 pips.
The daily USD/PLN FXStreet Trend Index also is slightly bullish, with the OB/OS Index neutral. RSI was neutral at 49.1554 at yesterday's close. Daily 2-StDev Volatility Bandwidth is shrinking at 221 pips, with ATR (14) expanding at 329 pips. The 1D 200 SMA is at 3.1340, while the 1D 20 EMA is neutral at 3.0475 .
Additionally, the BBH Global Currency Strategy Team see EUR/PLN support near 4.15 and resistance near 4.20 and then 4.25.