US and Russia Dispute Drives Market Shifts and Opportunities for Investors
Tensions are running high as the threat of war between Russia and Ukraine escalates on a daily and even hourly basis. While many had expected the Biden administration to be focusing on pandemic recovery and relations with China, the US has been forced to switch its attention to a potential Russian invasion – and the fallout that would come with it.
Many countries across Europe, Asia, and beyond have already responded by imposing sanctions on Russia. And after first making threats during talks held in January, the US is now debating taking stricter action against its rival’s provocations. From stock market crashes to gas price hikes, the global economic consequences of the dispute cannot be ignored – a point Putin himself will be well aware of.
Below we look at some of the key implications that governments, organizations, citizens, and investors will be looking out for in the coming days and weeks.
Further potential gas price hike presents an opportunity for investors
Governments across Europe were already coming to terms with sharp rises in global gas prices. In the UK, Ofgem announced that approximately 22 million energy customers will see annual increases of close to £700 from April 1st.
Some European nations have taken stronger action to limit the impact on consumers – but the rises are still very much being felt. And if more countries react to Russia’s actions by reducing their purchase of gas, or if Russia cuts supply to said countries, demand for gas will likely skyrocket – causing prices to increase further.
Such potentialities will raise worries for ordinary citizens who have already seen their living costs surge dramatically in recent months. But investors will also be paying keen attention to any developments, as these predicted fluctuations could create opportunities for profit through smart contract-for-difference (CFD) trading.
Should businesses soon be forced to pay more for this commodity, CFD investors will be well placed to pocket the difference in value.
Ripple effects for the foreign exchange market
Stocks and commodities aren’t the only instruments likely to feel the ripple effects of rising geopolitical tensions. With such influential global superpowers involved, the current standoff has driven significant shifts in the foreign exchange market too.
Investors looking to profit from the emerging crisis will want to explore currency pairs that have a high correlation to natural gas trade. One such pair is of course USD/RUB – US dollars and Russian rubles – which traders can expect to move lower if the price of natural gas continues higher. Given that natural gas appears to have turned parabolic through the beginning of 2022, many will be watching this pair expectantly.
The potential consequences of a Russian invasion are broad and far-reaching. With Putin recently recognizing two breakaway territories in eastern Ukraine as independent entities, the entire world is watching for what’s next.
This article has been published in accordance with Socialnomics’ disclosure policy.
