At the opening of the special dollar trading session for same-day transactions this morning, the very first contract was concluded at 23.90 RUB/USD, RUB 0.22, or almost 1 percent below the official rate set by the Bank of Russia for February 29. Consequently, the dollar dropped well below the psychological level of 24 RUB/USD on MICEX today. An hour and a half into the session, the exchange rate recovered to 24.0 RUB/USD.
Combined with a RUB 0.43 drop over the previous five days, the dollar has lost RUB 0.55, or 2.3 percent against the ruble in six trading sessions. The ruble’s continued steep climb against the dollar on the domestic market can be linked to the euro’s considerable advance against the US currency on international exchanges. The euro hit a new all-time high of 1.5238 USD/EUR against the dollar today, up from a previous peak of 1.5229 USD/EUR.
The dollar is sliding against other currencies, as well, tumbling to a three-year low of 104.28 JPY/USD against the yen, below the psychological mark of 105 JPY/USD. Meanwhile, most experts note that the US currency is not expected to correct upwards in the meanwhile, amid looming economic recession concerns in the US, suggesting that the Federal Reserve will revise its interest rate further down. “In all the years that I have been dealing with the foreign exchange market, I have never seen so much pessimism about the dollar,” Gartman Letter’s Editor-in-Chief Dennis Gartman pointed out, adding that there were clear signs of a “market mania,” in which everyone was currently trying to dispose of dollars.
US Fed chief Ben Bernanke’s latest report offered no consolation for the dollar, either, as he warned that the economic situation could actually be more complex than during previous recessions. Analysts say the Federal Reserve chairman’s exceeding candor has had an extremely negative impact on the US currency. The probability of a dollar crisis has surged, buoyed also by decisions of foreign central banks to cut back on accumulating dollars and converting their existing dollar reserves into other currencies. Furthermore, another factor that can weigh on the dollar is if Middle-Eastern oil exporters decide to revalue their currencies in relation to the US dollar, prompted by fears of increasing inflation pressures on their economies amid a weak dollar and record-high oil prices, experts say.
Will The Dollar Collapse?
Kyle & Svet
Windows to Russia!
- The Yuan / Ruble Exchange has begun… (windowstorussia.com)
- Remembering Gas Prices From an American In Russia! (windowstorussia.com)
- “China-Russia dollar move may signal end to manipulation of yuan” and related posts (personalmoneystore.com)
- Flaherty gets some of the blame for USD slide (forexlive.com)
- Allen L Roland, PhD: Death of the Dollar (grantlawrence.blogspot.com)
- Big psychological levels looming for the USD (forexlive.com)