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Is Russia a material risk for the euro? - J.P. Morgan

FXStreet (Łódź) - According to John Normand Russia's economic troubles shouldn't pose a significant risk for the single currency.

Key quotes

"If we judge currency risks by their impact on central bank policy, Russia doesn't quite register, at least not relative to the risk from an Italian economy that has been in recession for 11 of the past 12 quarters (Q4 2013 managed a 0.1%expansion)."

"In terms of growth, Russia's trade links to the region are trivial―exports to Russia are only 0.9% of Euro area GDP and only 1.3% of German."

"In terms of sentiment, it is statistically difficult to disentangle a sentiment decline due to an external factor like Russia from a decline associated with other factors which dampened growth this year. (One plus: Russia’s sentiment shock is coming alongside lower energy prices rather than higher ones.)"

"In terms of inflation, the EU/Russian food fight will probably take only 0.1% off regional inflation, so the ECB will likely ignore it."

"Geopolitics is a major issue for more minor currencies, but it isn't central to the EUR/USD view."

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