Macquarie: The impact of the Russia-Ukraine peace protocol on the euro is twofold.

Jin10 data reported on August 14, Macquarie Group global forex and interest rate strategist Thierry Wizman pointed out that a potential peace protocol between Russia and Ukraine could be a double-edged sword for the euro. The prospects of a peace protocol or an indefinite ceasefire would weaken last week's buying of geopolitical safe-haven assets like the Swiss franc and yen, while pushing funds towards the euro; but at the same time, it would provide greater energy security and drop energy costs, as oil prices are expected to fall. Conversely to the "peace" narrative, the conflict may also boost the outlook for European growth and re-inflation, as the conflict has spurred new commitments to increase European defense spending and related infrastructure spending. Therefore, emphasizing the double-edged impact of a potential peace protocol on the euro, Wizman stated that if a ceasefire or comprehensive peace protocol is reached, with European defense spending still high, the euro/USD will further rise.