Wednesday is a deal-breaker day between Merkel and Putin, the German and Russian leaders.
From a turnaround at the very opening of market, the ruble fell 2.2% on Monday’s trading as the importance of Wednesday’s talks became apparent and the dilemma between more sanctions and military aid was once again in the limelight.
Angela Merkel is using the meeting in Minsk, Belarus, to force a deal on the Ukraine issue under the possible threat of additional sanctions. The U.S are already bent towards not only more sanctions but also arming the Ukraine to force Russian-backed separatist fighters back and reclaim the country that desired EU membership.
In Monday’s press conference, straight out of the latest bout of discussions between Obama and Merkel, the U.S president said he had ordered his team to consider "whether there are additional things we can do to help Ukraine bolster its defenses in the face of Russian aggression." (Reported by Yahoo Finance).
Sanctions have been in place since March 2014; since that time the USDRUB has risen by about 80%, whilst the EURRUB has risen by nearly 85%.
These devastating market numbers may give Europe leverage in the talks on Wednesday, though the German chancellor is against military intervention and is looking for diplomatic means to bring peace to an increasingly violent situation.
Later on Monday, Merkel met with Canadian Prime Minister Stephen Harper in Ottawa, who reiterated the U.S approach saying, "Unfortunately at this time Mr. Putin has rejected diplomatic means. He seems to move his agenda through military violence."
The EU are on stand-by to see if the significant peace talks on Wednesday can strike a deal or if more sanctions are imposed.
MT4 chart: EURRUB
MT4 chart: USDRUB
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