Russian currency jumps even as greenback hits new high
- The Russian ruble strengthened on Friday to cap off a rocky week for the currency.
- The Russian currency gained 4.5% against the dollar, hitting 56.7 and hitting a high not seen since August 25.
- The rally came as other global currencies weakened against the dollar, which hit a new 20-year high.
The ruble rose on Friday, making it an outlier among other global currencies as they continued to weaken against the inevitable US dollar.
The Russian currency gained 4.5% against the dollar, hitting 56.7 and climbing to a high not seen since August 25. The performance of the ruble was also the strongest rise against the euro since mid-July.
The ruble fell slightly earlier in the week in response to Russia’s mobilization of more troops in Ukraine, while President Vladimir Putin threatened to use nuclear weapons in the conflict.
But the ruble rebounded to regain renewed strength as the currency has done several times this year. Russia implemented strict capital controls immediately after the invasion of Ukraine and sought to control cash outflows. The ruble has gone from being one of the weakest – and strongest – global currencies this year.
Simultaneously, the US dollar index hit a new 20-year high on Friday in response to further benchmark rate hikes from the Federal Reserve on Wednesday. The dollar typically responds by climbing higher when the central bank raises rates. Growing recession fears are also pushing investors to seek refuge in dollar-denominated assets.
But other currencies have fallen as the dollar index gains momentum. The pound hit a 37-year low against the dollar on Friday while the euro fell below $0.98.