The US dollar rose against a basket of global currencies, with the Russian ruble up 4.5% against the greenback this week. In the first week of September, Russia told the press that it would pay China for natural gas in rubles and yuan. Moreover, Switzerland’s production of Russian gold reached the highest level not seen since April 2020.
The greenback is rising, but so is the Russian ruble.
The US dollar exchange rate index (DXY) rose to new highs this week as a host of fiat currencies around the world were hit hard. For example, two days ago, the EU euro hit a 20-year low of $0.973 against the US dollar on Friday.
Currently, the euro is even lower at $0.9690, and is down 2.82% against the greenback over the past 30 days. The 30-day data shows that the yen fell by 4.72%, the pound sterling shed 8.17%, and the Canadian dollar lost 4.78%. China’s yuan has breached the 7:1 exchange rate against the US dollar for the first time in two years.
However, Russia’s native fiat currency, the ruble, has been stronger this year, and has started to make gains a month after the start of the Ukraine-Russia war. At the end of June, the Russian ruble hit a seven-year high against the U.S. dollar, and economists at the time said, “Don’t ignore it.” [ruble’s] exchange rate.”
On Friday, the ruble rose 4.5 percent against the USD, as the fiat rose to new highs against currencies around the world. The ruble did so as the DXY breached a 20-year high following the Federal Reserve’s latest rate hike. The rising ruble follows Russian President Vladimir Putin’s pledge earlier this week to use “all means” to end the war with Ukraine.
China pays for gas in roubles, Switzerland bought 5.7 tonnes of Russian gold in August, analysts say as the ruble’s exit boosted the currency.
There was also a hint of nuclear retaliation from the Russian president, and he said he was mobilizing more troops. Reuters also reported that China will buy oil from Russia in the first week of September in ruble and yuan terms.
Gazprom CEO Alexey Miller told reporters at the time that China paying in rubles and yuan instead of dollars was a “mutual benefit” for both partners. In addition, the Swiss Federal Customs Administration reports that Switzerland imported 5.7 tons of Russian gold reserves in August. The hoard was about $324 million, and the Swiss hadn’t bought such a cache in more than two years.
The country’s customs department, however, insists that no financial sanctions have been violated, saying that the Russian gold originally came from Britain. Switzerland has said it has breached any sanctions and 5.7 tonnes of bullion was first shipped from the UK in May.
While the ruble dropped a hair against the greenback, it remains at 56.87 to the dollar on Sunday, September 25, 2022 at the time of writing. According to the 30-day statistics, the Euro is currently down 2.82% against the US Dollar. The Russian ruble has gained 4.32% this month.
According to Investing.com’s Geoffrey Smith, Russians are increasingly withdrawing large amounts of money from their savings accounts. “Russians emptied their savings accounts following President Vladimir Putin’s call for action on Wednesday,” Smith continued.
However, he pointed out that Friday’s high amount of ruble withdrawals was not as big as the amount of ruble withdrawals recorded last February. “Increased demand for the ruble has resulted in a squeeze in interbank ruble rates, which has pushed the currency higher in the market,” Smith said on Friday.
What do you think about the Russian Ruble moving higher this Friday and gaining 4.32% against the greenback this month? Let us know what you think about this in the comments section below.
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