October 27, 2013

Forex Rates Reaction to Greenpeace Trouble

Forex Rates

Last week in the Arctic a Greenpeace vessel was seized by the Russian government. The ship was in the Arctic protesting at an oil platform. Apparently the 30 crew members were trying to protest the platform’s operation when their ship was towed to a Russian dock for suspicion of piracy. It might not create a huge ripple in forex rates, but it is yet another issue to add on to the issues happening in the world right now.

Forex Rates Need Positive News

Negative news is not going to do the forex market any favours. Investors are already losing confidence in certain markets due to economic troubles. Now there is one more thing to add fuel to the fire. Putin announced Wednesday that he is unsure what happened at the oil platform, but there are formal charges of piracy since the crew allegedly tried to seize the platform. Putin stated these Greenpeace workers are obviously not pirates, but the ship is now at Murmansk Port. The crew makes up citizens from 18 different countries including the USA. While lawyers have not been present during questioning diplomats were able to meet with most of the crew.

It might not be news to directly affect all forex rates, but it certainly does not create a settling picture. If anything it can make investors more unsettled given the recent USA-Russia relationship. Putin defended Syria and requested the USA back off, which it did although not after a promise Syria would give up all chemical weapons for safe destruction. There is still worry about this agreement since Syria needs to prove they are willing to do such a thing.

Some investors are worried forex rates will continue to go down for the USD, while safe havens will be sought due to the lack of resolution the USA president is showing. Many see the issue with Syria as a test in which the president backed down too easily from his air strike threat.

For some it is like North Korea started a trend and it will continue to be a trend of these countries that want something from the USA. First threats are made, a little action taken, and then the USA steps in to nullify the issue, but of course that is after promising something the country might want. For North Korea the threats were seen as a way to show the world the new leader has power and to get the USA to talk about helping out with the famine troubles. Forex rates sunk at the time North Korea was making headlines.

Greenpeace Movements and Forex Rates

Putin stated in his media address the border security service was unsure about the identity of the ship and therefore wanted to make certain nothing untoward was going to happen. There was worry it was not Greenpeace but a disguise to approach the platform. If the piracy crime sticks then the members could be in jail for up to 15 years. It certainly puts a strain on the relationships that are not in a good place right now. Forex rates might not react on this alone, but the yen and CHF might see a bit more activity than usual.




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