The world governing body of football, FIFA, is facing an unprecedented crisis on the eve of its congress in Zurich after Swiss authorities arrested array of senior officials on corruption charges.
The arrests were made on behalf of US authorities, after an FBI investigation that has been under way for at least three years. Those arrested in Zurich face extradition to the US.
Why market participants be concerned over FIFA arrests?
- Unites States department of justice and Swiss authorities have opened criminal proceedings over 2018 and 2022, world cup awarding. In 2018 world cup is scheduled to be hosted by Russia and by Qatar in 2022.
Hosting the World cup not only shows glamour it also brings about lot of revenues. Now it makes sense.
- Naturally Qatar stock market has taken a hit and Russian Ruble has weakened and moved below 4 week low made against dollar. USD/RUB exchange rate is currently trading at 52.7. This week it posted highest gain since January 20th 2015.
Vladimir Putin has hit back at US saying that US has no jurisdiction over FIFA and no wrong doing has happened on US soil.
Expect Ruble to lose further if World cup awarding to Moscow is held back and if so happens, expect Vladimir Putin to retaliate, which will worsen the relations further and bring the tension back in the market.
