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Ukraine tensions unravel, and so is the country, but the

The  parliament in Kiev has approved a law granting  self rule for the separatist regions in East Ukraine for three years. On December 7th, the regions will hold internal elections. This is a step forward towards peace, at a time when the ceasefire is not 100% respected. In addition, Ukraine approved another law granting  amnesty to the rebels.

If indeed this leads to peace, it could lead to the removal of the mutual sanctions between Russia and the European Union, thus eventually helping the euro-zone recovery.

The rebels in the East just said that they are not planning any federalism with Ukraine, meaning that while Ukraine sees one whole and decentralized country, the rebels see themselves as fully independent. Ukraine is basically unraveling.

In order to balance these laws, the members of parliament in Kiev also ratified the agreement between the European Union and Ukraine, in a joint online session with the European Parliament.

However, despite the ceremonies, the free trade section of the  agreement was postponed until 2016,  in accordance with a trade agreement set between Russia and Ukraine.

If we set the politics aside, the calming down of tensions could lead to no new sanctions in the near future, and perhaps later a removal of the sanctions.

A better business environment and more euro-zone exports to Russia will certainly help the fragile recovery in the euro-zone. Tensions with Russia have weighed on German business sentiment.

ECB president Mario Draghi often mentioned  geopolitics together with worries about the strong exchange rate. If the euro remains low and the relations with Russia improve, we could see a better recovery.

For more on the euro, see the EURUSD forecast.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.