Pound to Australian Dollar, NZ Dollar, Rand & US Dollar Exchange Rates Forecast: Ukraine / Russia Stand-off

March 3, 2014 - Written by John Cameron

STORY LINK Pound to Australian Dollar, NZ Dollar, Rand & US Dollar Exchange Rates Forecast: Ukraine / Russia Stand-off

The main global development during the weekend currency market close down has, without doubt, been the escalation of tensions in Southern Ukraine following last week’s apparent overthrow of Moscow’s ‘man in Kiev’, erstwhile Ukrainian President Viktor Yanukovych.

Initially, Yanukovych‘s replacement with acting President Oleksandr Turchynov appeared to have taken place without any major hitches. However, Russia’s position became clear towards the end of last week when Yanukovych resurfaced in Russia and held a press conference confirming that he still considered himself to be the rightful leader of Ukraine and that he had been deposed by European Union backed ‘thugs’.

Yanukovych’s comments were matched by incendiary actions from Moscow’s policymakers who sent masked gunmen into two of Crimea’s main airports. Further reports put the number of Russian troops now in the Ukraine at 2,000 and suggest that yet more are digging trenches on Russia’s border with the troubled state.

One hundred years after the outbreak of ‘the war to end all wars’, the developments have raised terrible comparisons with the early days of World War One. At this stage, global leaders are maintaining a dialogue in an effort to diffuse this incendiary situation, with US President Obama speaking to his Russian counterpart Vladimir Putin for a full ninety minutes on Saturday in an attempt to convince him to step back from the abyss and withdraw his troops from a region which many Russians still consider to be their territory. However, a peaceful end to this standoff is far from guaranteed, leaving analysts to ask the question ‘what if these military actions development into a war?’….

Pound to US Dollar Exchange Rate Forecast to Tumble as USD Currency Safe Haven

Any worsening of the tense standoff in Southern Ukraine will be likely to cause a marked shift into US Dollar denominated assets. The Greenback has lost some of its shine as a safe haven during the past two years thanks to the US Federal Reserve’s perseverance with its controversial Quantitative Easing programme, however a war involving two or more of the world’s major global superpowers would be likely to trigger a flood of support for the Buck, sending the Pound Dollar exchange rate tumbling back into the 1.5000s GBP/USD. Conversely, such a situation would see currency market participants abandon risk-laden assets, sending the Pound Australian Dollar, Pound New Zealand Dollar and Pound South African Rand exchange rates (GBP/AUD, GBP/NZD & GBP/ZAR) sharply higher. Meanwhile, a conflict on the Eurozone's doorstep would be forcast to send the Pound euro exchange rate spiralling towards the 1.3000 threshold GBP/EUR.

Important Pound Sterling Exchange Rates (As of: 03/03/2014 09:30 GMT)

The Pound Sterling to Australian Dollar exchange rate is trading down -0.48% at 1.87071 GBP/AUD.
The Pound Sterling to Canadian Dollar exchange rate is trading down -0.17% at 1.84831 GBP/CAD.
The Pound Sterling to Swiss Franc exchange rate is trading down -0.02% at 1.47191 GBP/CHF.
The Pound Sterling to Euro exchange rate is trading down -0.16% at 1.21299 GBP/EUR.
The Pound Sterling to New Zealand Dollar exchange rate is trading down -0.37% at 1.99419 GBP/NZD.
The Pound Sterling to US Dollar exchange rate is trading down -0.17% at 1.67058 GBP/USD.
The Pound Sterling to South African Rand exchange rate is trading down -0.58% at 18.00738 GBP/ZAR.

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