China does not approve sanctions imposed against Russia. In addition, it criticized the US for sparking off the Ukrainian crisis. The country's leaders also added that the US support of NATO expansion left Vladimir Putin with few variants of action. On Wednesday, Foreign Ministry Spokesperson Hua Chunying Beijing said that "sanctions are never fundamentally effective means to solve problems". She also criticized the United States and the North Atlantic Alliance for deploying weapons near Russia's borders, asking whether they had ever thought about the consequences of such actions.
China criticizes US actions
Although China does not fully support the decision made by Russia's authorities, it considers actions of the US to be irresponsible. Notably, this week, US President Joe Biden employed sanctions against Russia for the recognition of the independence of the breakaway regions in eastern Ukraine. The White House also pinpointed that it was considering new sanctions like other US allies, which hit Russia with punitive economic measures.
"If someone keeps pouring oil on the flame while accusing others of not doing their best to put out the fire, such kind of behavior is clearly irresponsible and immoral," Hua Chunying added.
Notably, the US imposed sanctions against China not so long ago. The situation was caused by human rights violations in the far western region of Xinjiang and the suppression of democracy activists in Hong Kong. "The US has been sending weapons to Ukraine, heightening tensions, creating panic and even hyping up the possibility of warfare," Hua Chunying emphasized. "We believe that all countries should solve international disputes by peaceful means in line with the purposes and principles of the UN Charter," China's UN Ambassador Zhang Jun said.
At present, the currency and stock markets have somehow stabilized. In addition, the IMF gave several recommendations to the Bank of England concerning its monetary policy.
BoE should reduce its balance
The IMF supposes that the BoE should sell government bonds worth 650 billion pounds to reduce its balance sheet by one-third. This action may help to stabilize the regulator's policy after 13 years of QE. The IMF warned that a change in the BoE's balance might cause volatility in the markets of government bonds and other assets. That is why the central bank should take cautious measures. The IMF also pinpointed that inflation might exceed 7% and approved the decision to raise the benchmark rate amid considerable inflation pressure. "Given continued demand-supply imbalances, a few Directors saw scope for moving forward some fiscal consolidation while bolstering spending on Build Back Better priorities later, which would improve growth over the medium term," the IMF report reads.
The Bank of England launched the tightening of its monetary policy in December of 2021, by hiking the interest rate to 0.5% from 0.1%. The regulator may start reducing its balance sheet as early as next month.
The IMF criticized the BoE for uncertainty over its plans about the bond selling in case the key interest rate hits 1%. The benchmark rate may reach the mentioned level in May. The IMF expects the Monetary Policy Committee to make a decision and announce the target range of the balance sheet size and the speed of bond selling. In conclusion, the IMF stressed that the Bank of England can still return to the quantitative easing program, if necessary.
Economists at Bank of America and Merrill Lynch also gave some recommendations to the regualtor.
Technical analysis of EUR/USD
Bulls managed to protect the support level of 1.1320, thus boosting demand for risky assets. A decline in the Russia-Ukraine tensions will lead to higher demand for the euro. If the pair consolidates above 1.1370, it will have a chance to resume climbing to its highs of 1.1420 and 1.1460. If the pair drops, traders are likely to open buy positions around 1.1320. The level of 1.1280 is still acting as key support. If the price returns to this level, bulls and bears will try to gain control over it.
Technical analysis of GBP/USD
The pound/dollar pair failed to reach its monthly highs once again. The pair did not consolidate near the resistance level of 1.3600. That is why the pair's future movement depends on its behavior within the range. If it manages to consolidate above 1.3600, it will rapidly jump to the highs of 1.3640 and 1.3690. If the pair slides below 1.3570, the pressure may rise, thus pushing the price to 1.3540 and 1.3490.
