Volatility Warning: Russian Credit Rating Cut to Junk by S&P, Ruble Tanks 6%
- The Russian ruble is back in the headlines as the oil dependent currency is trading over 6% lower on the over-the-counter foreign exchange market, following a sovereign downgrade by Standard & Poor's.
With the foreign exchange market remaining unfazed by the election results from Greece over the weekend, there is a new trigger of prospective Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term. Today, the Standard & Poor's ratings agency announced that it has cut Russia's sovereign debt credit rating to below investment levels.
The junk rating reflects the views of the ratings agency that the country's monetary policy can not adequately address domestic growth risks in the current environment. Russia's weak growth prospects have been outlined in tandem with increasing risks to the country's fiscal buffers.
According to Standard & Poor's, those could deteriorate further as external factors and increasing government support on the economy weigh in.
The Russian currency has tanked 6% in today's trading towards 67.60 for a US dollar.
Risks of extreme volatility in the Russian ruble pairs could prompt some brokerages to increase margin requirements in the coming days, although a number of companies have already introduced tighter leverage due to the risks associated with managing risks on the RUB crosses against the U.S dollar and the euro.
Standard & Poor's so far remains the only major ratings agency to downgrade Russia's credit rating to below investment levels.
The Russian central bank already hiked interest rates dramatically last December and drained RUB Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term from the market, in an effort aimed at stabilizing the Russian currency.
With the foreign exchange market remaining unfazed by the election results from Greece over the weekend, there is a new trigger of prospective Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term. Today, the Standard & Poor's ratings agency announced that it has cut Russia's sovereign debt credit rating to below investment levels.
The junk rating reflects the views of the ratings agency that the country's monetary policy can not adequately address domestic growth risks in the current environment. Russia's weak growth prospects have been outlined in tandem with increasing risks to the country's fiscal buffers.
According to Standard & Poor's, those could deteriorate further as external factors and increasing government support on the economy weigh in.
The Russian currency has tanked 6% in today's trading towards 67.60 for a US dollar.
Risks of extreme volatility in the Russian ruble pairs could prompt some brokerages to increase margin requirements in the coming days, although a number of companies have already introduced tighter leverage due to the risks associated with managing risks on the RUB crosses against the U.S dollar and the euro.
Standard & Poor's so far remains the only major ratings agency to downgrade Russia's credit rating to below investment levels.
The Russian central bank already hiked interest rates dramatically last December and drained RUB Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term from the market, in an effort aimed at stabilizing the Russian currency.