Dollar rebounds and stock markets fall in almost the entire world due to crisis in Ukraine

The international markets were not oblivious to the geopolitical uproar after the start of the crossfire between Russia and Ukraine, and they operated yesterday in a turbulent day.

In detail, the dollar rose 1.6% to settle at S/ 3.801. In this way, the Peruvian sol erased gains along with its Latin peers by depreciating -1.75%. Meanwhile, the Lima Stock Exchange closed with a loss of -1.22% in the S&P Peru General and fell by -0.61% in the S&P Peru Select.

“The dollar becomes more relevant and that has an impact at the level of emerging countries as long as the war continues. Now, if the US enters the conflict, the currency would have a downward course”, said José Duarte, CEO of Firbid.

In Europe, the epicenter of the conflict, the dollar had its biggest intraday gain in almost two years. The Russian ruble weakened 4.51% and the euro fell 0.95%; both with respect to the green ticket.

The most important stock markets of the Old Continent also collapsed. The FTSE index of the London Stock Exchange closed with a decline of 3.82%, while the DAX of Frankfurt (Germany) fell 3.96%. The CAC in Paris fell 3.83%, the FTSE MIB in Milan 4.10% and the IBEX 35 in Madrid 2.86%. The MOEX index of the Russian Stock Exchange concluded with a decrease of 33.28%.

However, Wall Street closed in the green and traced the initial losses. Thus, the Dow Jones rose 0.28% and stood at 33,222.83, while the selective S&P 500 advanced 1.50% and reached 4,288.70.

Meanwhile, WTI oil trimmed gains after breaking above $100 a barrel to close at $92.81, up 0.8%.

The key factor in calming the markets, according to analysts, has been the announcement by US President Joe Biden of new sanctions to economically isolate Moscow and the sending of US troops to Germany to reinforce the presence of the North Atlantic Organization (NATO) in Eastern Europe.

Havoc in Peru

The Minister of Economy and Finance, Oscar Graham, affirmed that the war will have an impact on Peruvian imports, causing a rise in their prices such as oil and some commodities such as wheat or corn.

Aurelio Ochoa, former president of Perupetro, explained that although Russian oil shipments to our country are almost zero, the supply and demand of other types, such as WTI, is altered.

For his part, Ramón Diez, an expert in agricultural economics from the Agrarian University, explained that the value of grains such as wheat and corn in our country would rise more, since the Russian-Ukrainian conflict has added to the scarcity of these products due to the severe drought affecting Brazil and Argentina; both producers and exporters.

An intensification of the conflict in Eastern Europe could “feed inflationary pressures in Peru. In addition, the swallowing capital would come out of the emerging markets like Peru and the exchange rate will rise”, said Arturo García, professor at ESAN.

Stable Mutual Funds

From Credicorp Capital SAF, they assure that the war would have a very low impact on the local mutual fund industry, since investment in European countries is barely 4%. However, he pointed out that a problem would be that clients start withdrawing their funds at this juncture.

This is how the main actors operated

Europe would be thinking of acquiring gas and oil from the Gulf countries as an alternative to Russian hydrocarbons after Russia’s military escalation in Ukraine.

The director of the International Monetary Fund (IMF), Kristalina Georgieva, warned that the war will have repercussions on the world economic recovery. Meanwhile, World Bank President David Malpass said they are preparing immediate budget support for Ukraine.

The largest capitalization cryptocurrencies, bitcoin and ethereum fell after the start of Russia’s military attack on Ukraine. Bitcoin fell 9.7% to $35,094, while Ethereum fell 13.78% to $2,345.