The Australian dollar is sharply lower today after the Russian central bank drastically lifted interest rates in order to starve of a further collapse of the rouble reviving fears of their last default in 1998.
At 6.10pm (AEDT) the Australian dollar is trading at US81.55 cents down from US82.44 cents in yesterday’s trade.
Russia’s move to lift interest rates by 650 basis points to 17% was seen as a desperate measure to save the rouble and the currency initially rallied more than 10% after the announcement. The good news however proved to be short lived, as traders digested the news which sent the currency tumbling again to over 80 per US dollar before settling at around 72, after Russia’s finance minister denied speculation that they were considering currency controls as an added protection measure.
The rule would have banned the Russian people form converting roubles into US dollars and placed restrictions on money leaving the country.
The Russian currency has now lost over 50% of its value since the start of the year.
Michal Dybula, from BNP Paribas noted that. “A large-scale run on deposits, once under way, would make capital controls pretty much unavoidable,” and that that “the authorities may start by forcing state-controlled companies to sell foreign assets and repatriate funds”.
Recommended Content
Editors’ Picks
EUR/USD regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold climbs above $2,340 following earlier drop
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.