Geopolitical Risk Premium Rising: Russia Warns on Arms Treaty as Trump Pushes Ukraine Land Deal

Global risk sentiment faces renewed strain as diplomatic tensions flare between Washington and Moscow, complicating the outlook for safe-haven currencies and European assets.

“Gold Dome” Violates New START

Dmitry Medvedev, Deputy Chairman of the Russian Security Council, explicitly warned on Tuesday that the US development of the “Gold Dome” missile defense system fundamentally violates the New START Treaty. Medvedev stated the system destroys the strategic link between offensive and defensive weapons.

The friction follows President Trumps announcement of plans to deploy defense systems in Greenland to intercept threats from space and abroad. Russia views this as an existential escalation, warning that the potential resumption of nuclear testing by US leadership would freeze strategic dialogue entirely.

Trump's Ultimatum to Kyiv

Simultaneously, a Financial Times report citing multiple sources reveals the Trump administration has delivered a stark ultimatum to Ukraine: concede the Donbas region to Russia or lose critical US security guarantees. This “territory for security” proposal represents a significant pivot in US foreign policy, potentially forcing a redrawing of the map in Eastern Europe.

Forex Impact

• Volatile environment for the Euro (EUR) due to escalation with Russia.
• Support seen for the Swiss Franc (CHF) and Gold as hedges against political instability.