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This is 2025, and global economic impact has been changed—for better or for worse—because of many events like the Ukraine-Russia war. These events have caused the financial markets and affected various instruments using CFDs to react, causing traders to reconsider their strategies.

Key Takeaways

• In 2025, the Ukraine conflict disrupts energy, currencies, and metals, creating trading volatility.
• A flexible way to trade economic shifts offered by CFDs without owning assets.
• Precious metals like gold, palladium and safe haven currencies like USD, JPY thrive amid instability.
• A war resolution could calm markets, while continuation keeps volatility high—both scenarios affect CFDs.
• Traders should use risk management to handle the financial markets.

What Are CFDs in Trading?

CFDs are derivatives that let users speculate on an asset's price movements without owning the underlying asset. Futures contracts, or contracts for differences (CFD), are agreements between traders on the price difference of an asset at position close and open. It allows traders to open long or short positions, covering all types of markets, such as currency, stocks, indices, commodities, etc.

Roots of the Russia-Ukraine Conflict

This conflict has deep historical, political, and strategic roots. Among the chief reasons for the war are:

• Territorial Disputes: Russia invaded and annexed Crimea in 2014 before claiming independence for Luhansk and Donetsk in 2022, sparking a full-scale invasion.
• NATO Expansion: Ukraine's relationship with NATO and the EU was considered a threat by Russia, which motivated this behavior.
• Power Play: The Russian government aims to limit Western influence, referring to its invasion as a special operation, a claim largely debunked.

The war continues in 2025, disrupting international supply chains and energy markets, which subsequently impact financial markets and CFDs.

Forex Market Before Ukraine-Russia War

Before the Ukrainian war, financial markets were shaped by the post-COVID-19 recovery, monetary policy, and the geopolitical front and traveled a very different road.

• U.S. Dollar Strength: Anticipated rate increases from the Fed during October 2023 pushed the U.S. dollar higher, with the DXY index showing levels of 95-96 at the end of 2021.
• Russian Ruble Resilience: The RUB held steady at 70-75 USD, supported by oil and rate hikes (8.5%), despite tensions with Ukraine.
• Low Geopolitical Risk Premium: In 2021, financial markets did not foresee a full-blown war with Ukraine. Economic data like U.S. CPI releases drove volatility more than geopolitical concerns.
• Emerging Markets: EM currencies like PLN and HUF were under mild pressure from rising U.S. yields but stable due to EU recovery funds and trade.
• Euro Stability: ECB’s low rates supported EUR, despite energy price rises and inflation concerns, keeping EUR/USD in a narrow range.
• Commodity Currencies: CAD, AUD, NOK rose with oil (Brent near $80/barrel), metals and agricultural goods.

How Did the Ukraine War Affect the Forex Market?

The war disrupted global economies, impacting forex markets through:

• Safe-Haven Currency Demand: The invasion increased global uncertainty, pushing traders into safe-haven currencies such as the USD, CHF, and JPY. The USD, in particular, strengthened as a global reserve currency, a safe haven in times of economic distress.
• RUB Collapse: Post western sanctions RUB crashed over 30%. These sanctions include the exclusion of Russian banks from the SWIFT and the freezing of Russia’s foreign reserves (over $600 billion).
• Euro Weakness: The EUR weakened due to Europe’s energy reliance. Before the war, Russia accounted for around 40% of EU natural gas and 25% of its oil. Sanctions disrupted supply chains and drove up energy prices, triggering spikes in inflation in the eurozone. The EUR/USD fell below $1.10 in March 2022, a two-decade low.
• Commodity-Driven Currency Volatility: Russia and Ukraine are key exporters of commodities—wheat, oil, natural gas, palladium, nickel, and others. The war has interrupted these supplies, sending prices soaring (for example, Brent crude oil prices have exceeded $100 per barrel). Currencies of commodity-exporting nations, like the CAD and AUD, saw mixed effects. Conversely, import-dependent nations like Japan saw the JPY strengthen as a safe haven despite energy cost pressures.
• Emerging Market (EM) Pressures: Eastern European currencies like PLN and HUF depreciated due to trade ties with Russia.Globally, EM currencies faced additional strain from rising U.S. interest rates, as the Fed tightened policy to combat war-induced inflation.
• Inflation and Central Bank Responses: The war pushed prices of energy and food higher, contributing to inflation and causing central banks to change monetary policy. The Fed’s aggressive rate hiking cycle went on to be supportive for the USD, while the more cautious ECB, to accommodate Europe’s energy crisis, pressured the EUR. This divergence in policy increased the volatility of the forex market.

2025 Market Impacts from the Ukraine Conflict

Natural Gas

• Supply Disruption: Europe was the dominant buyer of Russian natural gas (over 40% of EU demand pre-2022), has drastically reduced pipeline exports since the war. Russian gas saw a drop of 80 billion cubic meters (bcm) from Europe. Also, Ukraine termination of gas transit contract in late 2024 further cut Russian gas flow to Europe.
• Price Impact: European natural gas prices remain volatile, though milder weather and strong inventories have tempered spikes in early 2025. Prices are still elevated compared to pre-war levels (around twice as high as 2021 averages).
• Current Trend: The loss of Russian gas keeps long-term pressure on prices, with Europe diversifying to LNG from Qatar and the U.S.

Oil

• Supply Dynamics: Russia, the world’s second-largest oil exporter, redirected exports from Europe to Asia post-2022 sanctions. Despite G7 price caps, Russian oil trades at discounts but maintains stable export volumes.
• Price Impact: Brent crude has fluctuated, dropping to $66/barrel on March 2025 due to U.S. policy shifts and weak demand signals, but refinery hits keep refined product prices elevated. Pre-war Brent averaged $80 in late 2021, the war added a risk premium, though global supply adjustments have moderated it.
• Current Trend: Crude remains sensitive to broader geopolitical moves like potential shadow fleet disruptions in the Baltic.

Currencies

• Russian Ruble: Sanctions and energy revenue losses initially crashed the RUB (over 30% drop in 2022), but capital controls and Asian oil sales stabilized it. By 2025, low oil prices and Ukrainian infrastructure attacks strain Russia’s war economy, pressuring the RUB despite resilience (e.g., trading ~90-100 to USD).
• Euro: The EUR remains under pressure from Europe’s energy crisis and inflation, though less severe than 2022’s low of $1.05. Diversification from Russian gas has eased dependency, but high LNG costs and economic slowdown keep EUR/USD volatile (~1.03-1.10 range).
• Safe-Havens (USD, JPY): The U.S. dollar (USD) retains strength as a safe-haven amid global uncertainty, bolstered by Fed policy. The Japanese yen (JPY) also acts as a net transmitter of spillover, per studies, gaining during inflationary war phases.
• Current Trend: Emerging market currencies near conflict zones face renewed weakness, while RUB’s hard currency needs push discounted oil sales to China.

Precious Metals

• Gold: Gold prices spiked post-invasion over $2,000/oz in May, 2022 and remain elevated in 2025 due to persistent geopolitical risk and inflation.
• Palladium and Platinum: 45% of global palladium and 15% of platinum is supplied by Russia. Supply disruptions and sanctions drove price hikes. Platinum shows strong spillover to currencies except JPY, with prices holding high in 2025 due to industrial demand and conflict risk.
• Current Trend: Studies indicate geopolitical risk causally impacts metal-currency connectedness. Traders should keep an eye on the market about volatility if tensions escalate, with gold and palladium as hedges.

Trading CFDs in 2025: Opportunities and Risks

The Ukraine conflict create a mixed bag for CFDs traders:

• Opportunities: Volatile markets mean big price swings, perfect for short-term CFDs trades on oil, gold, or forex pairs like USD/JPY.
• Risks: Sudden news (e.g., ceasefire talks) can flip trends fast, raising trading risks.

Traders need sharp strategies, think stop-loss orders and real-time news tracking to navigate this turbulence.

War Scenarios and Market Outlook

If the war ends, it could stabilize the oil and natural gas supply to Europe and decrease the demand for precious metals like gold due to a drop in the geopolitical tensions. Also, it could boost the currencies like RUB and EUR due to the stability in the energy supply zones which in turn affects the safe haven currencies like USD and JPY due to low demand.

Conversely, if the war continues it could intensify the economic impact and affect the EUR due to natural gas and oil supply disruptions which in turn could increase the demand for the safe haven assets like gold and safe haven currencies like USD and JPY. 

Conclusion

The Ukraine conflict has turned financial markets into a wild ride. From spiking energy prices to jittery currencies and precious metals holding strong, the ripples are hitting everything, especially CFDs. These flexible tools let traders jump on the volatility without owning the assets, but it’s not all smooth sailing. Big opportunities come with big risks, and sudden twists like a ceasefire hike can turn the table in an instant.

For traders, it’s about staying sharp—keeping an eye on the news, mixing up your strategies across forex, commodities, and indices, and playing it smart with tight risk controls. Beyond the charts, the war’s economic fallout is reshaping inflation, supply chains, and global ties. Whether it ends or drags on, one thing’s clear: adaptability is the name of the game. In this unpredictable mess, CFD traders who can roll with the punches might just appear ahead.

Disclaimer: This communication is for information and education purposes only and should not be taken as investment advice, a personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without taking into account any particular recipient’s investment objectives or financial situation, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past or future performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. Fxview makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication.