The Russian Ruble is in freefall this morning despite efforts made overnight from the Central Bank of Russia to at least slow the decline. The CBR threw everything including the kitchen sink at the currency problem overnight following the largest one day drop against the dollar since 1998. Initially, the 6.5% rate hike to 17% appeared to have brought some short-term reprieve for the Ruble but unfortunately for the CBR, it was much more short-term than they hoped and it wasn’t long before the markets rejected the central banks efforts and opted to continue on the same course.
Clearly many traders were very grateful to the CBR for giving them such a great opportunity to buy in at such discounted levels. Since the initial pull-back to 58.33, the dollar has sky rocketed more than 26% before settling just above 73. At the time of writing, it doesn’t look like traders are in any way interested in exiting their longs yet, with prices just consolidating. I get the feeling that traders are just taking a breather and there could be some more crazy selling to come in the Ruble.
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