It’s not every day that a nation, let alone two, announces that it will be applying for NATO membership. But yesterday, when Sweden joined Finland in announcing its process towards membership of the defence body, the attention was elsewhere: Russia. Russia has seemingly struggled to make the advances it has expected to achieve with ease in Ukraine. Despite its military setbacks, it has still talked a big game about the consequences of these two nations joining NATO. With particular reference to Finland and the border it shares with the nation, Putin had spoken of the technical exercises and deployment of troops that would inevitably ensue should the nations pursue membership. Stakes and tensions were high therefore surrounding this potential geopolitical shift.
This signposted potential reaction and the propensity for wider-spread conflict given such a reaction from Russia had also helped to undermine risk conditions. It has served its own role therefore in moderating growth expectations to the detriment of more volatile currencies and assets in favour of safehaven assets, including the US Dollar. However, yesterday President Putin softened his tone in the face of the accession announcement from the two Nordic nations, saying that he had ‘no problems’ with Finland or Sweden and that their inclusion within NATO posed ‘no direct threat to Russia’. The President of course made this conditional on a characteristic admonition to NATO not to place military posts in these two countries nor to make them the hosts of nuclear weapons.
The path of NATO expansion still remains vulnerable. At present, Turkey’s President Erdogan is suggesting he will block and refuse the applications to join the alliance. However, the risk of more immediate tensions and wider-spread conflict around Northern and Eastern Europe has subsided. Accordingly, the Euro, whilst still very much overwhelmed by the Dollar, has ticked up from its lows sitting around 1 cent above its Friday closing price. Should the geopolitical rhetoric from Russia revert to a more hard-line approach once again, this risk could rapidly be priced back into EURUSD.
Discussion and Analysis by Charles Porter
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Daily Brief – Fade America
Charles Porter
Thu 26 Feb 2026
Fade America There have been times during Trump’s second term that have had markets and financial commentators alike calling for an era of ‘sell-America’. Sell-America is the notion describing a scenario in which investor sentiment sours towards the US so much so that valuations across US assets decline. This is a unique scenario because many […]
Daily Brief – An upset in the minutes
Charles Porter
Thu 19 Feb 2026
An upset in the minutes Minutes of the Federal Reserve’s January meeting were published yesterday evening. As you may tell from the market reaction, the contents of such minutes were far from in line with market consensus. If you cast your mind back to January 28th, the FOMC voted 10-2 to keep rates on hold. […]
Daily Brief – How do we really feel about tariffs?
Charles Porter
Tue 24 Feb 2026
How do we really feel about tariffs? As we wrote yesterday, financial news outlets erupted as if it were Christmas come early upon the initial suggestions that the Supreme Court would likely find Trump’s tariffs contrary to law. Upon the realisation later on during the US session that this expectation had become reality, headlines doubled […]
