Currency News: Russian Ruble Recovery In Sight While South Korean Won Tumbles From Recent Heights

Currency News

Russian Currency Stabilizes As Economic Recovery In Sight

“Buy cheap and sell dear”- Benjamin Graham. Recently, investors are more confident that Russian Ruble has finally stabilized through supply and demand, in an era of cheap oil and cannibalizing sanctions upon the Russian economy. In addition, many countries apart of the OECD are now experiencing negative interest rates, causes bonds to become extremely unattractive, even placing them into a bond bubble.“We are looking at it and have been talking to issuers since the middle of this year” about selling ruble Eurobonds, said Andrey Solovyev, global head of debt capital markets at VTB Capital in London. “Investors think that the ruble has more or less stabilized at the current levels and are eagerly buying.”- Bloomberg news.

Investors are thus seeking to find a haven for their capital, estimated at about $9 trillion dollars. This has allowed many companies issuing bonds in Russian rubles, to be able to raise on average $4.4 billion rubles, maturing in less than six years. This has as well allowed Russian  10-year bond yields to reach historic heights (prior to the sanctions in 2014) at 8.1%.

Currency News

Many are believing that the currency stabilization represents as well the stabilization of the Russian economy, with data reports showing Russia is expected to exit its current recession by early of next year. Therefore, investors who are seeking alternative investment may now flock to Russia, believing the worst is behind, optimistic of a recovery in sight.



South Korean Won Currency Drops From Being Best Performing Currency

Three major negative events, occurring over the past week have caused the South Korean won to tumble from its recent height, over the past quarter (few months). Concerns of expansionary global monetary policy as well as Samsung Electronics’ recent negative headwinds regarding its Note 7 bursting into flames and recall following. Samsung, being one of South Korea’s Largest conglomerates, caused the Seoul stock market spike in volatility and tumble after the news report. The external pressure of global monetary policies, mainly revolves around reports of the likelihood of the Federal Reserve increasing interest rates, which would put a downward pressure onto the won. Additional negative impacts relate to the increasingly uncertainty regarding North Korea, and a high possibility of them conducting their third nuclear test of 2016. Expectations are mixed for a rate increase, as the Fed seems pretty divided, with investors believing a 22% chance of rate hike in September, and 57% in December.

(Source: Business Korea,

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