Call Us Today ~ Local: 443-815-4114

Currencies: Ruble tumbles as U.S. announces sanctions against Russia

Home » Real Estate » Currencies: Ruble tumbles as U.S. announces sanctions against Russia

Currencies: Ruble tumbles as U.S. announces sanctions against Russia

Getty Images

The Russian ruble tumbled against the U.S. dollar on Friday as the two countries announced volleying sanctions and punitive measures against each other in response to Russia’s alleged hacking during the U.S. presidential election.

The ruble USDRUB, +1.2724% traded at 60.97 to the dollar, compared with 60.20 late Thursday, a move of about 1.3%. The size of the move may have been impacted by the market’s low liquidity, which is typical in the final trading week of the year, when many market participants are out of the office.

Tensions have been high between the two countries of late, with Russia accused of hacking into the Democratic National Committee as well as the email account of John Podesta, the campaign chairman of Hillary Clinton. Earlier this month, President Barack Obama implied that Russian President Vladimir Putin was directly involved in the hacks.

The hacks were widely seen as contributing to Clinton’s loss and having been undertaken to favor Donald Trump, her Republican opponent, now the president-elect.

On Thursday, Obama announced he would expel 35 Russian diplomats from the U.S.; he also ordered the closure of two Russian diplomatic compounds. On Friday, Putin said that while Russia reserved the right to respond to the move, heisn’t expelling any U.S. diplomats now.

Trump isn’t expected to be as strict against Russia; he has dismissed reports that Russia helped him win as “ridiculous” and attacked the credibility of the Central Intelligence Agency over its reported conclusions on the matter. On Wednesday, when asked about the hacking, he said, “I think we ought to get on with our lives.”

Friday’s move in the ruble could prove short-lived, especially if there are no major economic sanctions announced by the Obama administration. On Thursday, the exchange-traded funds that track the Russian equity market rallied after the announcement of punishments, with investors looking ahead to the incoming administration.

The ruble has generally been stronger throughout 2016, rising more than 16% against the dollar. For the most part, this has been attributable to a recovery in commodity prices, to which Russia’s energy-heavy economy is heavily correlated. Crude oil prices CLG7, -0.20% are up 45% this year.

Another boost to Moscow’s currency followed the U.S. election in November. Trump’s victory is widely seen as supportive for Russia; the president-elect has a number of ties with the country, has repeated praised Putin, and he has promised to get tough on both China and Japan—two of Russia’s primary rivals in Asia.