Russia's Ruble Crashes 10% in Two Days as Investors React to New Sanctions

Russia’s currency and stock market began the week with big losses in response to the new sanctions imposed on Russian officials with strong ties to President Putin.

The Russian ruble continued its decline in Tuesday’s Forex session, trading down 5.5% against the dollar at the lowest point of the day, before closing off with a 4% loss at a rate of 63.01 rubles per dollar:

At the height of the sell-off, the ruble was trading at a level (63.92 rubles per U.S. dollar) not seen since December of 2016.

Russia’s RTS Index was down more than 4% during the first half of the trading session, but managed to recoup most of the losses in the second half of the trading day, finishing with a small loss of 0.4%.

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European Commission to Invest €300 Million in Developing Domestic Blockchain Ecosystem

In a statement issued today, The European Commission (EC) said it will be bringing heads of state, as well as representatives of EU territories and academics to discuss the development of the artificial intelligence and blockchain industries within the EU’s Digital Single Market.

The press release said the European Commission has set aside €300 million to be invested in the European blockchain space as part of the EU’s strategy to “harness the many opportunities of blockchain and avoid a fragmented approach.”

During the event, which is scheduled to take place tomorrow in Brussels, the EC will lay the groundwork for the European Blockchain Partnership, an initiative designed to support European companies and innovators within the Europen blockchain economy.

“Many proposals still need to be agreed. Europe should move forward, and building on the Digital Single Market, increase investments and foster cooperation in a series of key areas such as artificial intelligence, blockchain, eHealth and innovation.,” said the EC.

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Canadian Dollar Posts Gains vs. USD on Improving NAFTA Negotiations

The Canadian dollar gained approximately 0.65% on Monday on a more positive outlook on NAFTA negotiations, in addition to a rise in expectations that the Bank of Canada might raise rates again this year.

The loonie also got a boost today from Larry Kudlow, director of the White House National Economic Council, who told CNBC that "good progress is being made on North American Free Trade Association talks."

Additionally, Bank of Canada's first-quarter Business Outlook Survey - Spring 2018, which indicated that “business sentiment continues to be positive,” pushed the CAD to close the day off at a 1-month high of 1.2698 against the USD.

While the survey's tone was positive overall, BofA also pointed that some Canadian companies remained cautious with their sales forecasts due to uncertain trade policies in the U.S., "While firms’ expectations for US economic growth have strengthened further, some cited rising protectionism and reduced competitiveness as factors limiting the impact on their sales.," said Bank of Canada.

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Russian Ruble, Stocks Plunge Amid Fresh Sanctions on Russian Oligarchs and Officials

The Russian ruble crashed approximately 4.2% vs. the dollar on Monday. This is the largest one-day drop since January of 2016, when the ruble hit all-time lows against the dollar at 85.9493.

Monday’s sell-off was largely driven by the fresh sanctions imposed on seven Russian oligarchs and seventeen officials close to President Putin, which were announced last Friday in response to the supposed Russian interference in the U.S. elections, in 2016.

In addition to the currency fall, shares of major Russian firms also lost value during Monday’s trading session, as investors began to digest the knock-on effects of the new sanctions on the Russian economy.

Russia’s RTS Index closed on Monday with a whopping loss of 11.44%. At the height of the sell-off, the RTS was down more than 12%.

The new sanctions could put in jeopardy Russia's fragile currency, which has been fairly stable since April of 2017, trading between 56-60 rubles to the dollar.

The Russian ruble took on big losses between 2014 and 2016 - falling from 33 rubles/dollar in June of 2014, all the way down to 85 rubles/dollar by Jan. of 2016 - as the first wave of sanctions against Russia were unveiled as a response to the Crimean annexation of 2014.

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Turkish Lira Slides to Record Lows as President Erdogan Calls for Lowering Interest Rates

The Turkish Lira dropped to record lows against the dollar today as President Erdogan rejected investors’ concerns, as well as calls for increasing interest rates, over excessive inflation.

The USD/TRY currency pair hit record highs on Monday morning at 4.0757. At press time, the USD/TRY is trading around 4.05. President Erdogan said investors who call for higher interest rates are jealous of Turkey’s economic growth.

Concerned economists and investors have urged Turkey’s authorities to raise interest rate for to taper off excessive inflation in the Turkish economy, however, Turkish monetary authorities have continued to implement various stimulus measures to keep inflation growing.

In a speech in Ankara today, the Turkish president said this:
“Those who say Turkey’s growth rate is excessive are speaking out of jealousy.”
Additionally, President Erdogan stated that unemployment rate will drop below 10% as increased investment results in more jobs and economic output, “We’re talking about an investment-support incentive system, and here, first of all, we need to save investors from these high interest rates.," adds Erdogan.

Although the president has made it a priority to keep interest rates low, currency speculators and investors have been abandoning the Turkish lira in droves. Since the start of 2018, the lira has lost more than 7% of its value against the U.S. dollar.

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Bank of Montreal Starts Blocking Debit/Credit Card Transactions Tied to Cryptocurrencies

Bank of Montreal has started blocking all buying and selling of cryptocurrencies. In an internal bulletin sent to its wealth management products division, the bank said the decision was taken to protect clients due to the excessive volatility of cryptocurrencies.

According to the leaked bulletin, posted by an anonymous BMO employee on Reddit, Bank of Montreal has been blocking clients from using their credit and debit cards, as well as online payments methods such as Interac Online.

“Clients attempting any cryptocurrencies transactions using a BMO Debit or Credit MasterCard will be blocked, and will be presented with a screen message advising them that transaction cannot be completed.,” said the BMO memo.

And BMO isn’t the first Canadian bank to take such drastic measures. Last month, stories began to surface on various forums that TD Canada Trust was blocking cryptocurrency transaction on their TD Visa cards.

But while some major Canadian financial institutions may have temporarily prevented their clients from dealing in cryptocurrencies, some data has emerged recently that suggests tech-savvy Canadians have turned to P2P marketplaces like LocalBitcoins, to circumvent the blockade.

In the last two weeks of March, over $13 million CAD worth of bitcoin was traded on LocalBitcoins by Canadian investors, according to figures by This is a significant increase to prior weeks, where weekly volumes barely exceeded one million Canadian dollars.

And Canadians aren’t the only ones to be saved by P2P bitcoin marketplaces. In February of 2017, investors in China flocked to LocalBitcoins after major Chinese cryptocurrency exchanges were forced offline by regulators from the People’s Bank of China.

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SEC Freezes $27 Million in Illegal Stock Sale Profits from Longfin Corp. Pump-and-Dump

The Securities and Exchange Commission has frozen millions in illicit trading proceeds from the illegal distributions and sales of restricted shares of Longfin Corp. stock. The agency said today that the assets of Longfin CEO, as well as three other individuals involved in the scheme, have been frozen.

According to the SEC, the market capitalization Longfin rose above $3 billion on the NASDAQ, after the company announced the acquisition of a purported cryptocurrency business.

The SEC claims in their press release that Amro Izzelden Altahawi, Dorababu Penumarthi, and Suresh Tammineedi illegally dumped large chunks of their restricted shares on unsuspecting investors as the price of Longfin shares spiked on the news. Through this scheme, the trio allegedly amassed more than $27 million in illegal profits.

The SEC's complaint, unsealed today in federal court in Manhattan, alleges that Venkata Meenavalli, CEO of Longfin, directed the company to issue more than two million unregistered, restricted shares to corporate secretary and a director of Longfin, Amro Izzelden Altahawi.

Meenavalli also issued tens of thousands of restricted shares to Penumarthi and Tammineedi. The SEC explains that the scheme violated existing federal securities laws that specifically forbid the trading in unregistered shares distributed to persons affiliated with the company.

Robert Cohen, Chief of the SEC Enforcement Division’s Cyber Unit, said the quick actions of the agency prevented the illicit profits from going offshore:
“We acted quickly to prevent more than $27 million in alleged illicit trading profits from being transferred out of the country.”

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