Commodity and Currency Correlations of the Russia-Ukraine War

Abstract

On February 24, Russia's Special Military Operations invaded Ukraine in what became one of Europe's most significant military conflicts since the Cold War. Meanwhile, this military operation inevitably affected the rest of the world instead of only being a localized engagement. For instance, the USA and western Europe went on high alert about the impact of the invasion on the global economy. These fears were confirmed as the world economy followed a path affected by the Russia-Ukraine crisis, particularly concerning commodities and currency. In one of our recent studies, we investigated the correlation between commodities and currencies. During our research, we looked at the link between past localized conflicts and how they impacted various nations' commodity prices. The relationship between the two variables can explain the significant damage to a country's production and export capacity and the driving force behind inflation. In this dataset, we first calculate the correlation ratios based on evidence such as the production and export of oil, wheat, and the state of the Russian currency (rubles). The changes in these aspects were investigated before and during the war, as the conflict is still ongoing. Then, we combine these correlations with similar conditions in other conflicts to conclude. Finally, we empirically investigate the correlations between these commodities and currencies.