This week has seen the Russian rouble dominate the rest of the markets, seeing significant results. This started Monday as the Russian Central bank abandoned its currency’s trading corridor, allowing it to freely float. However as crude oil continued its disastrous month yesterday, the rouble dropped a further 1.5% against the dollar, having already lost nearly 30% this year. Also working against the Russian currency was the fact the US and European Union weighed new sanctions against Russia, which have seen the rouble suffer the biggest losses of the 24 emerging markets.
The Canadian dollar saw some respite at the start of the week, reaching the highest level in a week against a soft US dollar in the wake of poor labour data. However, weaker oil prices at the back end halted the Canadian dollar progress, holding the currency near to its five year lows. Today will see Canadian manufacturing sales data released, which could provide some support at the end of a mixed week.
Finally, the Japanese yen continued its decline following reports of a possible snap election. With speculation over Prime Minister Shinzo Abe calling this to push through reforms, the yen fell to fresh seven year lows against the US dollar. Further speculation that their government could delay its planned sales tax increase weighed down on the yen, as it drove up Asian equities and reduced demand for the safe haven. The yen stabilised a little later in the week, but is potentially a short term result as economic reports could point to weak data.
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