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2 Apr 2014
EMEA EM Express: Russian-Ukraine crisis affects trading partners
FXStreet (Łódź) - Even though the markets are calmer about the situation in Ukraine, the threat of destabilization in the region remains real and continues influencing CEE countries´economies. The Russian-Ukrainian crisis was in a big part responsible for the weakness in the March Manufacturing PMI releases, which showed a slowdown in the recovery in Poland, the Czech Republic or Hungary.
According to Rafał Benecki from ING, especially in Poland, where the PMI fell to 54 from 55.9 seen in February, "corporates blame the uncertainty in Ukraine and Russia as the main negative factor which affected new business dynamics." Exports to Russia and Ukraine decreased by 6-7% between January and March this year, as the Polish Economy Ministry estimates.
Should Russia impose more sanctions on Poland, apart from the current administrative barriers which affect transport, "and together with the likely GDP drop in Ukraine and Russia, it may further affect Polish exports to those trading partners."
It seems however that Russia is not willing to damage its economic ties with other countries further. Russian PM Dmitry Medvedev said on Wednesday at an investment conference that "political ambitions and prejudices" over Ukraine should not be allowed to harm the economic relations between Russia, the EU and the US.
Meanwhile earlier on Wednesday, NATO Secretary-General Anders Fogh Rasmussen announced that the alliance had suspended all practical cooperation with Moscow, as the presence of Russia's army close to the Ukrainian border was still „incredibly concerning.”
Despite Putin's assurances made to German Chancellor Angela Merkel on Sunday, the forces had not been withdrawn. The amount of Russian troops currently stationed close to the Ukrainian border would be sufficient for a incursion into Ukraine and the „accomplishment of objectives” in 3 to 5 days, in the opinion of NATO officials.
"It is important for everybody in the world to understand the NATO alliance takes seriously this attempt to change borders by use of force," U.S. Secretary of State John Kerry commented on the decision.
Economic data
On Tuesday the Czech Republic released GDP, PMI Manufacturing and Budget Balance data.
Fourth quarter Czech GDP grew by 1.8%, slightly down from 1.9% registered the previous quarter and against forecasts of remaining at the same level. The Manufacturing PMI dropped a notch in March to 55.5 from 56.5 in February, below market consensus of a slide to 55.9.
The Czech budget balance for March showed a surplus of CZK 43.59B to which it narrowed from CZK 50.07B seen in February.
Technicals
Following the release of March Manufacturing PMI numbers on Tuesday, which showed that the recovery has slowed down in such countries as Poland, the Czech Republic or Hungary, all of the CEE currencies fell by about 0.1% against the euro.
USD/HUF and USD/PLN rose on Tuesday, to 222.6200 and 3.0259, respectively.
The USD/HUF daily FXStreet Trend Index was slightly bearish, and the OB/OS Index neutral. RSI was neutral at 42 at the last close. The daily USD/PLN FXStreet Trend Index as well as the OB/OS Index were neutral. RSI was neutral at 44 at the last close. The 1D 200 SMA was at 3.1134, while the 1D 20 EMA was at 3.0356.
According to Rafał Benecki from ING, especially in Poland, where the PMI fell to 54 from 55.9 seen in February, "corporates blame the uncertainty in Ukraine and Russia as the main negative factor which affected new business dynamics." Exports to Russia and Ukraine decreased by 6-7% between January and March this year, as the Polish Economy Ministry estimates.
Should Russia impose more sanctions on Poland, apart from the current administrative barriers which affect transport, "and together with the likely GDP drop in Ukraine and Russia, it may further affect Polish exports to those trading partners."
It seems however that Russia is not willing to damage its economic ties with other countries further. Russian PM Dmitry Medvedev said on Wednesday at an investment conference that "political ambitions and prejudices" over Ukraine should not be allowed to harm the economic relations between Russia, the EU and the US.
Meanwhile earlier on Wednesday, NATO Secretary-General Anders Fogh Rasmussen announced that the alliance had suspended all practical cooperation with Moscow, as the presence of Russia's army close to the Ukrainian border was still „incredibly concerning.”
Despite Putin's assurances made to German Chancellor Angela Merkel on Sunday, the forces had not been withdrawn. The amount of Russian troops currently stationed close to the Ukrainian border would be sufficient for a incursion into Ukraine and the „accomplishment of objectives” in 3 to 5 days, in the opinion of NATO officials.
"It is important for everybody in the world to understand the NATO alliance takes seriously this attempt to change borders by use of force," U.S. Secretary of State John Kerry commented on the decision.
Economic data
On Tuesday the Czech Republic released GDP, PMI Manufacturing and Budget Balance data.
Fourth quarter Czech GDP grew by 1.8%, slightly down from 1.9% registered the previous quarter and against forecasts of remaining at the same level. The Manufacturing PMI dropped a notch in March to 55.5 from 56.5 in February, below market consensus of a slide to 55.9.
The Czech budget balance for March showed a surplus of CZK 43.59B to which it narrowed from CZK 50.07B seen in February.
Technicals
Following the release of March Manufacturing PMI numbers on Tuesday, which showed that the recovery has slowed down in such countries as Poland, the Czech Republic or Hungary, all of the CEE currencies fell by about 0.1% against the euro.
USD/HUF and USD/PLN rose on Tuesday, to 222.6200 and 3.0259, respectively.
The USD/HUF daily FXStreet Trend Index was slightly bearish, and the OB/OS Index neutral. RSI was neutral at 42 at the last close. The daily USD/PLN FXStreet Trend Index as well as the OB/OS Index were neutral. RSI was neutral at 44 at the last close. The 1D 200 SMA was at 3.1134, while the 1D 20 EMA was at 3.0356.