EUR/SD drops sharply on Russia news. Economists at Scotiabank expect the pair to challenge the early September low at 0.9865.

Ukraine tensions pick up

“Russia’s announcement that it will call up 300K reservists for the war in Ukraine and Putin’s nuclear saber-rattling in response to Western ‘blackmail’ sent a jolt across markets. The mobilization news effectively undoes some of the hopes for a calmer geopolitical backdrop that Ukraine’s recent offensive had prompted and suggests a long conflict lies ahead still.” 

“EUR weakness below the 0.9950 support zone that has held the market up over the past week leaves the EUR looking soft and vulnerable again, with the early Sep low at 0.9865 at risk.” 

“The broader downtrend persists and safe ground for the EUR (above 1.0130) remains distant.”