As the Russia-instigated armed conflict happens, the Russian rouble nosedived to an all-time record low today, Monday, February 28. This event in the currency markets took place while the US dollar soared against almost all of its peers.
We want to help our readers presently holding units of the Russian rouble and the US dollar to know how their currencies are affected by the current Russia-Ukraine war. We believe sharing this latest foreign exchange-related report will help them stay updated and proactive.
According to the foreign exchange news posted online by international news source Reuters, the Russian rouble plunged to as low as 119 roubles per US$1 in early trading today. The official currency of the Russian Federation screamed through its previous low of 90 roubles per dollar.
The declines in the Russian rouble came despite the Central Bank of the Russian Federation’s announcement of a slew of measures yesterday to back domestic markets. They transpired following the Western allies’ ratcheting up of sanctions.
Among these threatened penalties are the impositions of restrictive measures on the Central Bank of the Russian Federation to preclude it from deploying its global reserves to undermine the sanctions and the blocking of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication or SWIFT international payments system.
With the Russian rouble plunging to a record low, the US dollar, on the other hand, is the primary beneficiary of the present tension between Russia and Ukraine. The dollar index was well up from Friday’s close of 96.570, recording 97.244.
Additionally, the greenback even gained a fraction of the Japanese yen, which was at 115.58 yen per US$1. Carol Kong is a foreign exchange strategist at the Commonwealth Bank of Australia.
She remarked that their group believes the US dollar faces a hazard of pushing north of the 97.47-resistance level in the near term. Kong also cited that the extent of the US dollar’s gains would depend on any further leap in volatility, the evaluation of the US Federal Reserve System’s tightening programs, and the sell-off’s size in global equities.
The foreign exchange expert remarked that high energy prices were capping the Japanese yen, considering Japan imports most of its energy needs.
Besides the Russian rouble, the euro tumbled as much as 1.3 percent to US$1.112. Then, it recovered a little to trade at US$1.1165.
The euro was also off 0.7 percent versus the Swiss franc and down 0.9 percent on the Japanese yen. In the middle of Russia’s invasion of Ukraine, the British pound sterling was a little weaker at US$1.336.
The New Zealand dollar slid 0.72 percent to US$0.6686, and the Australian dollar sank 0.68 percent to US$0.7183. We believe that the decline in the Russian rouble’s value is certainly unfavorable news for people holding and using this foreign currency.
An addition to their present worry is Russian President Vladimir Putin’s placing of the country’s “deterrence forces” wielding nuclear weapons on high alert.
Alternatively, people spending using the US dollar can delight in the fact that the United States’ official currency has held firm as the Western allies bolster Russia sanctions.
We recommend holders of the Russian rouble monitor the news regarding the Russia-Ukraine war. By being updated with the latest developments, we believe these consumers will be able to prepare how to deal and manage with their plummeting currency.