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    The madness of the Russians and the madness in the markets

    Contrary to the expectations of most experts, Russia attacked Ukraine. The scale of this attack is causing a veritable panic in the markets. Whether we are talking about currencies, raw materials or stock markets, a lot is happening today. Interestingly, there are also cryptocurrencies.

    The weakness of the PLN

     

    The Polish currency is losing particularly strongly, as it is adjacent to all three actors in these events. Within 24 hours, the euro increased PLN 10/100 and now costs PLN 4,64. The Swiss franc and the US dollar soared, gaining a dozen cents each. The Swiss franc, which reached PLN 4.53, was the most expensive since the memorable year 2015. If the situation in the East escalates, we will long for such a strong złoty. In the event of a calming down, the Polish currency should return to “normal” value.

     

    The stock markets are upside down

     

    While we have high volatility in currencies, it is even more serious on the stock markets. Russia’s most important US dollar stock index has been overvalued by more than 50% for a while today. Today it has lost only a third of its value since the beginning of the day. Polish indices are already falling by almost 10%. It is quieter in the West, where the most important German and French markets fall by “only” 4%.

     

    What about the raw materials?

     

    Raw material prices are rising for two reasons. The industry is growing due to the possibility of cutting Russia and Ukraine off the market. On the other hand, precious metals gain, as is often the case in difficult times. As a result, gold has been the most expensive for over a year.  Oil has surpassed $100 per barrel, the highest price since 2014. Industrial metals are also on the rise.

     

    Where’s the limit of insanity?

     

    Let’s not forget that the attack took place on Thursday. What does that mean? Tomorrow is Friday and the markets close. The question is which transactions investors want to conclude before the weekend. So it may be that we will see further strong movements tomorrow.

     

    Maciej Przygórzewski, the leading currency expert at Currency One, operator of Internet services Kantor.pl and Walutomat.

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