The ruble collapses, sanctions
The Russian ruble was set in motion with the beginning of August is a sacred month for the Russian currency. USDRUB sharply jumped Monday morning to 65.47 – highs over the last two months. More important, the dollar gained almost 2 rubles, or more than 3% since the beginning of August. EURRUB came in the morning to 72.75, showing a jump of more than 2 rubles.
Additional trigger on Friday was the news about introduction of sanctions in the case Skrobala.
Note that the weakening of the ruble gained momentum over the last week and peaked on Friday. Formally, the sellers of the Russian currency was based on bad news for the markets: the fed gave no clear signal of a rate cut in September, and trump has imposed new tariffs on Chinese goods. The biggest blow in these conditions, often to emerging markets – are most vulnerable to demand fluctuation risks. At the same time, the ruble lost considerably more competitors, caving in under its own weight after the previous strong growth.
Monday marked the rebound of the Russian currency from its recent lows, as markets are clearly considered excessive for the dramatic momentum of the weakening of the previous days. In addition, the U.S. Treasury clarified that the prohibition of American banks to buy government debt is not affected OFZs in rubles.
Despite the purchase, should carefully look at the immediate prospects of the Russian currency. Investors are often wary of the ruble in August. This means that bad news find immediate and stronger (than in previous months) a response in the form of depreciation. But more importantly, judging by the soaring volatility in the financial markets, we are entering a period when investors with ruble will be a start of something, taking decisions about selling.
Recent history tells us that at the start of August, the decline in the ruble, as a rule, remains under intense pressure in the coming weeks and at risk of falling by 10%. So it was in the 2018, 2015 and 2014. When August began with the growth of the ruble continued. But, apparently, this is not the case.
The material is provided,