If you're wondering how Ukraine's unexpected attack on Russia's Kursk region is affecting the financial markets, especially the Russian rouble, you're in the right place. As the world's best investment manager and financial market journalist, I'm here to break it down for you.
During Tuesday's trading session, the Russian rouble weakened to a 10-month low against the dollar, dropping to 96.60 before rebounding to the day's opening level. By 1500 GMT, the rouble was flat at 90.99 to the dollar, marking a 6.2% loss since the attack on Aug. 6.
Trading in major currencies shifted to the over-the-counter (OTC) market due to Western sanctions on the Moscow Exchange and its clearing agent. One-day rouble-dollar futures were down 0.4% to 89.60 on Tuesday, providing guidance for OTC market rates.
The central bank's official exchange rate for Wednesday was set at 92.65, a 3% jump from Tuesday's rate. Despite support from higher oil prices and increased net daily sales of yuan, the rouble continues to weaken against the dollar and euro.
Analysis of the OTC market shows the rouble weakening by 1.3% to 12.07 against the yuan, making it the most traded foreign currency in Moscow. Against the euro, the rouble was down 0.2% at 99.70, with the official exchange rate at 96.69 roubles to the euro.
Furthermore, oil prices, a global benchmark for Russia's main export, were down 1.0% at $81.24 a barrel as markets saw reduced risk of a wider war in the Middle East.
Overall, the impact of Ukraine's attack on Russia's rouble is evident in the currency's fluctuations against major currencies, with geopolitical tensions and market dynamics playing a significant role in shaping the financial landscape. As an investor, staying informed and adaptable to these changes is crucial for managing your portfolio effectively.