Fitch downgrades Russia to C, hints at imminent sovereign default

Anil Panchal FXStreet

Global rating agency Fitch downgrades Russia from ‘B’ to ‘C’, the second rating downgrade in a week, during Tuesday.

In addition to the rating cut, Fitch also mentioned, “The recent downgrade of a 'C' rating for Russia reflects belief that a sovereign default is imminent.”

Key quotes

The further ratcheting up of sanctions, and proposals that could limit trade in energy, increase the probability of a policy response by Russia that includes at least selective non-payment of its sovereign debt obligations.

To a lesser extent, the risk of imposition of technical barriers to servicing debt, including through the direct blocking of transfer of funds, or through clearing and settlement systems, have also risen somewhat since our last review.

Market implications

The news may propel USD/RUB towards another record high, around 129.70 by the press time.

Read: USD/RUB Price Analysis: Ruble keeps bounce off weekly resistance below 130.00

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

British Pound surges against US Dollar ahead of US NFP data

The British Pound trades 0.5% higher to near 1.3340 against the US Dollar during the European trading session on Thursday. The GBP/USD pair reflects strength as the US Dollar underperforms its peers ahead of the United States Nonfarm Payrolls data for June, which will be published at 12:30 GMT.

EUR/USD pops to multi-day highs above 1.1450 post-NFP

EUR/USD gains traction and surpasses the 1.1450 mark, reaching a fresh multi-day peak on Thursday, amid a marked correction in the US Dollar. Meanwhile, the pair leaves behind two consecutive daily pullbacks as investors continue to gauge the latest US NFP data.

Gold climbs above $4,100 following US Payrolls

Gold maintains its bullish momentum on Thursday, surpassing the $4,100 per troy ounce mark. The precious metal’s marked rebound comes on the back of the US Dollar’s retracement and higher US Treasury yields following the release of a softer-than-expected NFP report.