GBP, EUR Continue to Gain against the Russian Ruble (RUB) on Geo-Political Tensions
If you're looking to make an international money transfer, we recommend TorFX.
The Euro (EUR) conversely has also seen gains, trending in the region of 48.9100 versus the Ruble, on the prospect that the Eurozone may tighten their sanctions against Russia.
The near future suggests both the Pound and Euro—which have weakened in the currency market of late—will continue to gain against the Ruble as the uncertainty continues.
Thursday will see the release of the Russian Inflation Rate figures for August, which are presently predicted to remain high with some economists forecasting a figure of 7.2% by the close of 2014.
Economist Olga Lapshina stated: ‘Inflation data as before remains at the centre of attention. Given the introduction by our country of counter-sanctions in the form of an embargo on many product imports, we’ve revised up our annual inflation forecast by 1.1 percentage points.’
However, the situation between Russia and Ukraine appears to be continually escalating, which is causing some anxieties in the market and encouraging investors to seek safe haven currencies such as the Swiss Franc (CHF) and the Japanese Yen (JPY) which are more stable in their exchange rates.
The Ruble as a result has fallen to its lowest exchange rate in recorded history against the US Dollar (USD) at 37.503, whilst tumbling down to the depths of a four-month low versus the Euro.
The EU appears to be in stasis in its relations with Russia at the moment as they attempt to tighten the sanctions in place within the next week as they try to force Russia to pull back troops.
However the effect on the EU could prove catastrophic, with Russia supplying almost a third of the EU’s gas demand.
Eastern Europe is likely to be hit hard as they almost solely rely on Russia for fuel as they are Europe’s most expansive supplier of oil, coal and gas.
A specialist inside the EU Commission stated: ‘In the short-term, we are very worried about winter supplies in southeast Europe.’
Meanwhile the Pound is trading amid a poor data day with Markit’s Manufacturing Purchasing Managers Index (PMI) flopping with the lowest productivity in the manufacturing field in the UK in the latter 14 months.
The figure was published at 52.5 in August, far short of the 55.1 economists had predicted and the 54.8 that had been attained in July.
At present, the Pound has reached session highs of 62.3537 versus the Ruble, whilst the Euro has attained up to 49.2795. As the situations continue to escalate, causing severe instability in the currency market, the Pound and Euro appear to be likely to continue gaining against the weakened Ruble. F
Furthermore the UK and EU will see the release of the central bank’s interest rate decision this week, which may cause some fluctuation for their respective currencies.
With an absence of economic data on Tuesday the Russian Ruble has continued to tumble across the board. This is as a result of the increasing tension between Russia and Ukraine. As the semantic field of war becomes ever more present in the media traders are adopting risk aversion strategies, choosing to invest in safe-haven currencies.
With very little by way of influential, market moving data on Tuesday Euro movement is likely to be dictated by geopolitical tension and foreign currency changes.