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© Jack Moscrop / Global Look Press
Political turmoil usually leads to a money flow to safe havens like the Swiss currency. But this week, an unusual pattern led to the biggest decline of the franc against the euro since January 2015.

The Trump administration issued an expanded list of sanctions last Friday, targeting Russian businessmen and companies. Separately, Trump threatened Russia with missile strikes on Moscow's ally Syria.

The political instability caused a sell-off on the US stock markets, and strengthened safe havens like gold and the Japanese yen. But another safe haven, the Swiss franc, took a hit.


"The Swiss franc is driven predominantly by capital flows for now and Russia sanctions included Swiss companies where Russians are invested," said Manuel Oliveri, a currency strategist at Credit Agricole SA, told Bloomberg.

"Increased need for liquidity by Russians, and no appetite for leaving cash in Switzerland, is changing the franc's correlation with risk sentiment," he said, adding market speculation on this issue was hard to confirm. An example of such a Swiss company is Sulzer AG.

Shares in Sulzer, a machinery manufacturer, fell on Wednesday. The next day, however, they surged the most in 21 years after sanctioned Russian businessman Viktor Vekselberg cut his stake.

"The Swiss franc has been caught squarely in the Russian sanctions issue. For a small, open economy like Switzerland, getting caught in a geopolitical tug of war is extremely risky. Switzerland still derives value from safety and privacy. So when that is threatened in any way certain investors get nervous," Peter Rosenstreich, head of market strategy at Swissquote Bank SA, told Bloomberg.


Comment: With the West increasingly looking like it has lost the plot, Russia is encouraging bold moves in the financial arena: Russian tech giant dumps SWIFT in favor of domestic alternative

RT also reports:
Russia to suspend nuclear, rocket cooperation with America, ban US tobacco & alcohol - draft law

Russian lawmakers have drafted a bill suspending cooperation with US companies in the nuclear, missile and aircraft-building spheres, as well as introducing restrictions on imports of alcohol and tobacco produced in the US.

"The bill is about alcohol and tobacco products and about ceasing or suspending international cooperation in the nuclear sphere, rocket engine building and aircraft building between Russian companies and organizations under US jurisdiction," one of the bill's sponsors, MP Ivan Melnikov (Communist Party), was quoted as saying in the State Duma's Twitter message.

"The bill charges the government and top officials in Russian regions with the task of developing mechanisms to replace US goods and services on the Russian market. We expect this to become a push for the development of the Russian economy," Melnikov said.

Another provision included in the current version of the draft is the proposal to allow Russian companies to produce various goods copyrighted in the United States or in countries allied with the US without getting licenses from copyright holders. "This will be like a punch to the solar plexus for the Americans, because all achievements and all domination of the Anglo-Saxon, Western world are based on intellectual property and we are targeting this very right," MP Mikhail Yemelyanov (Fair Russia) said in comments to Interfax. The particular list of patents that fall under the counter-sanctions will be formed by the government.

The bill, which follows the latest round of US sanctions on Russia, was drafted on Friday jointly by State Duma speaker Vyacheslav Volodin and the heads of all four parliamentary caucuses.

The lower house will have the first discussion on the bill and work out the schedule for passing it on Monday, said MP Aleksandr Zhukov (United Russia).

Deputy Duma speaker Pyotr Tolstoy (United Russia) said that the parliament could consider the bill on reciprocal measures in reply to the United States' unfriendly actions towards Russia in May.

"At least, we are giving an adequate reply to the United States of America. We are stopping the cooperation with the USA in three very important spheres: the nuclear industry, the aircraft building industry and the rocket engine industry," the head of the Fair Russia party, Sergey Mironov, said.

The head of the Liberal Democratic Party of Russia, Vladimir Zhirinovsky, added that the import restrictions on US goods and services would not be applied to purchases made by individuals, but rather on wholesale batches.

On April 6, The US Treasury Department released a list of 24 Russian citizens and 14 Russian corporations that fall under new sanctions imposed over Russia's foreign policy. Earlier this week, Prime Minister Dmitry Medvedev said that Moscow will ban imports of US goods as part of a response to Washington's latest move.

"These can be not only American securities... but also a whole range of other goods that are delivered to the Russian market or produced by American businesses on the territory of our country," Medvedev said, answering questions from the Russian State Duma on Wednesday.

The prime minister stated that Moscow's response to new sanctions should be adequate and measured. "Response measures should be well-calculated, should not harm ourselves, they must be adequate," he said.

On Friday, Vladimir Putin's press secretary, Dmitry Peskov, told reporters that Kremlin officials have not studied the State Duma proposal on reciprocal sanctions in detail, but said that "it is possible to assume with confidence that any measures that will be taken would not hurt Russia's national interests."