Ruble Drops to 2016 Low as Traders Ask How Far Sanctions Will Go

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The ruble extended its steepest slide in almost two years as a fresh round of U.S. sanctions against Russia deepened concern about what could be targeted next, Bloomberg News reported. Investors who had been building long positions in the currency earlier in the summer rushed for the exit, causing a two-day plunge of as much as 5.1 percent. Analysts at Citibank said it looks like traders are already pricing in a worst-case scenario of sanctions on banks and new sovereign debt. “Now we may have the problem that people will cut at the same time using a very small window,” said Koon Chow, a strategist at Union Bancaire Privee in London. “The market should have already adjusted yesterday but the risk is that there could still be follow-through as people have simply been unable to get out.” Read more.