In onshore trade on Wednesday, the Russian Rouble plummeted to new lows, despite Moscow’s efforts to prop up its devastated economy and ensure hard currency availability in the wake of new economic sanctions sparked by its invasion of Ukraine.
The Rouble soared to 120.83 to the dollar on the Moscow Exchange following two days of market closure before clawing back some losses to settle at 120, or 12.5 percent lower than Friday’s close.
After hitting a high of 131 per euro in early trade, it finished 6.3 percent lower at 127.
Since Russia’s invasion of Ukraine sparked heavy economic sanctions, the country’s financial markets have been in upheaval. During Russia’s invasion of Ukraine, the European Union cut links with Belarus’ central bank, which is a Russian ally.
Inflation in Russia increased to 9.15 percent in February, up from 8.73 percent in January. In normal circumstances, euro depreciation would be welcomed by an export-dependent union that has long failed to meet its 2% inflation target.
Following the Swiss National Bank’s commitment to preventing franc strength on Monday, the ECB’s comments are being scrutinized. Many central banks are concerned about currency market turbulence, with some acting to stabilize exchange rates, from Poland to South Korea.
Over the course of a year, a 1% euro devaluation raises import prices by 0.3 percent on average. If oil prices continue to rise, the currency could fall to roughly $1.065.
The dollar rose higher on Thursday, as the euro gave up some of its big gains from the previous day ahead of high-level negotiations between Ukraine and Russia.
Short bets on the Indian rupee hit a near two-year high as investors increased their pessimistic views on major Asian currencies. On Thursday, the yuan was roughly unchanged versus the dollar, trading at 6.32.
After a larger move to the downside last week, the EURJPY has experienced a robust comeback over the following several days.
After attempting to break above the highest high of the day, the USDCHF is plummeting to a new low for the day.
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