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The dollar declines against most major currencies

The dollar declines against most major currencies

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Jim Anderson - Public Relations

The US dollar is getting cheaper along with the euro and the yen in the Forex on Wednesday after a significant strengthening on the eve before.

The dollar was supported on Tuesday by the decision of the Federal Reserve System to launch a credit mechanism to support the short-term commercial debt. Market. The Federal Reserve thus expected to prevent the growing problems with financing companies in the context of the spread of coronavirus. The American Central Bank used a similar mechanism during the 2008 financial crisis.

The US currency will not become cheaper. Despite the significant easing of monetary policy by the Federal Reserve in recent years, given the huge demand for dollars in the world in the context of the crisis caused by the coronavirus pandemic.

As of 7:30 London time, the EURUSD rate rose by 0.23% to 1.1022 against $1.0997 at the close of trading on Tuesday. The value of the US currency against the yen fell by 0.87% to 106.76 yen compared to 107.70 yen at yesterday’s close, the value of the euro fell by 0.67% to 117.65 yen against 118.44 yen on Tuesday.

On the eve the dollar jumped by almost 2% paired with the euro and 1.4% against the yen.

 

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The dollar is in the red due to Trump's disappointing virus plan

The dollar is in the red due to Trump's disappointing virus plan

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Erik Holm - Head of media

The dollar fell on Tuesday amid expectations of a sharp rate cut by the Federal Reserve after US President Donald Trump’s plan, which had disappointed the markets, aimed at containing the outbreak of coronavirus.

Trump on Wednesday announced a 30-day ban on entering the US from Europe, responding to calls for action to curb the rapidly spreading coronavirus epidemic. The dollar lost 0.7% against the yen to 103.80 and fell by 0.2% against the euro to $1.13 against 7:00 London time.

Australia announced Wednesday a$11.4 billion stimulus package that includes wage subsidies and cash payments to small businesses. Nevertheless, the Australian dollar continued to decline due to growing concerns about the recession.

Investors are waiting for the outcome of the meeting of the European Central Bank on Thursday to understand how aggressive the new regulatory measures will be.

 

Euro and the dollar jumped by 5% at the opening of trading

Euro and the dollar jumped by 5% at the opening of trading

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Erik Holm - Head of media

On Tuesday, March 10, at the opening of trading on the Moscow Exchange, the euro and the dollar rose sharply. At 10:15 Moscow time, the euro grew by 5.36% to 81.7 rubles, the dollar rose by 4.85% to 71.89 rubles. The Moscow Stock Exchange index fell by 16% at the start of trading, the RTS index fell by 16%.

At the same time, oil is getting more expensive. The Brent and WTI brands rose by 5.73% and 5.63%. On the eve of the price of Brent crude oil fell by 30%. This is the worst short-term fall since 1991 when the United States launched the very first operation against Iraq called the desert Storm.

The reason for such a catastrophic fall is the collapse of Russia’s deal with OPEC + and the subsequent decision of Saudi Arabia to increase raw material production and lower prices. Earlier, the Bank of Russia announced the suspension of currency purchases on the open market for 30 days.

The Ministry of Finance said that it intends to sell currency from the NWF in the market. These measures can mitigate the reaction of the ruble to the recent drop in oil prices. Note that today the Moscow Exchange has named the upper limit of the possible dollar exchange rate at the level of 75.2125 rubles and the euro at the level of 85.785 rubles.

The fall of the ruble and stocks became one of the strongest in history

The fall of the ruble and stocks became one of the strongest in history

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Jim Anderson - Public Relations

The Russian currency lost about 5% on the first trading day after a long weekend. By Tuesday evening, the dollar was worth 71.8 rubles, which is 3.27 ruble higher than Friday's close. The euro. Was trading at 81.4 rubles (+3.9 ruble). The stock market opened with a drop in the Moscow Exchange and RTS indices by 7.9% and 8.6%, they closed with a fall of 8.1% and 13%.

According to the Moscow Exchange, stock trading on Tuesday reached 257.3 billion rubles. This is almost three times higher than the average daily turnover since the beginning of the year (91 billion rubles) and five times more than the average turnover last year (46 billion rubles). 

So the market won back the collapse of the OPEC+ oil production reduction deal. Due to which on Monday, March 9, the price of Brent oil fell by 330% and reached $31 per barrel at the bottom. This is the most significant daily drop since 1991. On Monday at Forex, the ruble fell to the dollar by 8.8% to 74.5 rubles. To the euro – 9.7% up to 85 rubles. Russian companies traded in London lost up to a third capitalization.