In the right direction: how can change the courses of the dollar and the Euro before the end of senyorita link
7 October 2019, 18:53
Monday, October 7, the Russian currency is corrected after growth at the close of trading last week. According to experts, in the near future the strengthening of the ruble may start due to the influx of foreign investment assets of developing countries. In addition, exchange rate growth, facilitated by low inflation and a moderate increase in oil prices. How can change the dynamics of the ruble until the end of autumn at RT.
- © PHILIPPE HUGUEN / AFP
Monday, October 7, at the auction of the Moscow exchange, the Russian currency is weakening moderately. The US dollar rose by 0.47% to 64.9 per ruble, and the Euro 0.4%, to 71.2 ruble.
The official exchange rates of the Central Bank on 8 October amounted to 64,82 rubles per dollar and 71.14 rubles for Euro.
The ruble is adjusted after strengthening in the previous session. So, on Friday, the dollar fell to 64.5 rubles, and the Euro to 70.8 rubles.
«The national currency has risen in price on Friday, so the auction on Monday, slightly losing ground. But in the medium term, the ruble will move in the direction of strengthening in line with the most profitable currencies of emerging economies,» — said in a conversation with RT, chief analyst GK Teletrade Peter Pushkarev.
Over the past few weeks, global investors started to invest in risky securities and currencies. The reason for this behavior of market players were the actions of the Central banks of China and Europe. About this in an interview with RT said an analyst with a management of operations on the Russian stock market IR «freedom Finance» Alexander Osin.
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«A positive factor for the rouble and emerging markets in General is the activation of the September monetary stimulus in China and QE in the Eurozone, the beginning of which is scheduled for November 2019,» explained aspen.
In September the people’s Bank of China lowered the reserve ratio in the country. This measure should increase lending and to strengthen business activity in the PRC. At the same time the European Central Bank has promised to renew from November 1 program of quantitative easing. The ECB intends to include the printing press, and issued money to buy government bonds of Eurozone countries. The actions of the regulator can lead to an increase in the money supply in the region, and to accelerate inflation.
Analysts believe that the measures Central banks need to protect the EU economy and China from a sharp slowdown.
In the near future the ruble will support the slowdown in Russia, says Alexander Osin. Thus, the decrease of consumer price growth could support demand for ruble-denominated Federal loan bonds (OFZ).
According to the latest statistics, in September consumer prices in Russia grew by 4% compared to the same period of 2018. Thus, the indicator has reached the target level of the Central Bank. Moreover, in October the value could fall below the target range of the Central Bank — to the level of 3.7—3.8%. This is stated in the review of economic development.
Slowing inflation may also affect the policy of the Central Bank. So, earlier the first Deputy Chairman of the Central Bank Ksenia Yudaeva not rule out the reduction of the key rate.
«We will consider various effects, but we see some room for further rate cuts,» — said Yudaeva.
With the beginning of the year, the Bank of Russia three times already lowered its key rate from 7.75% to 7% per annum. At the same time interest rates in Europe and the United States also declined and remain much lower than in Russia. According to Peter Pushkareva, this situation reinforces the attractiveness of Russian government bonds to investors.
«Due to the relatively high interest rate of the Central Bank and maintained the high yield for holders of government bonds. For paper of the Ministry of Finance with a maturity of ten years, investors receive a «prize» at the rate of 6.9% per annum. It looks very advantageous against the background of practical absence of any significant profit from dollar-denominated investments in US Treasury bonds or even negative rates on the guaranteed securities in Euro», — said Petr Pushkarev.
- © Natalia Seliverstova/RIA Novosti
The movement from memory
RT interviewed analysts added that the dynamics of the ruble to a certain extent will depend on changes in oil prices. According to the exchange ICE in London, today the cost of raw materials of benchmark Brent crude trading at near $58-59 per barrel. The experts predict growth of quotations up to the end of the year.
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«Despite the slowdown in the global economy, the policy of the countries — participants of the agreement OPEC+ supports oil prices. The situation in the short term looks relatively balanced, there remains the possibility of growth in oil prices by the middle of next year. Until the end of 2019, the price can reach $60-63 per barrel», — said Alexander Osin.
The rise in oil prices may support the currency in the fall, but at the same time, the influence of commodity quotes on the ruble will be limited by the fiscal rule. It provides that during the growth of commodity quotations the Ministry of Finance buys foreign currency and thereby puts pressure on the ruble. In the case of the collapse of the energy market, the Ministry stops operation and the pressure on the ruble weakens. As a result of such action decreases the dependence of the national currency from oil.
Recently the implementation of fiscal rules weakened the correlation between ruble and oil, but currency market players are still sometimes react to changes in commodity quotations force of habit. In an interview with RT told the General Director IK «Oriole Capital» Andrey Khokhrin.
«The ruble will react to the oil by reason of the historical memory of the market: players remember that the fall of commodity quotations of the ruble traditionally weakened. However, this reaction will be less linear,» explained Khokhrin.
Strictly according to the course
In General, analysts do not expect major weakening of the national currency until the end of autumn. According to the forecast of Alexander Osina, the dollar will remain in the range of 62 to 66 rubles, Euro — ruble 69-73.
In this case the expected rate cuts, the fed may lead to the weakening of the American currency on the world market. Peter Pushkarev believes that in this case the dollar may drop to 60 rubles to the end of the year.
«In the next few weeks the dollar will trade in the range of 64.5—66.5 rubles, and then may revert to the district to 62.5—63 rubles, and by the end of the year to the mark of 60 rubles. The Euro, respectively, would fall below the level of 70 rubles, and will be there another six or nine months while the ECB does not decide to shut down the printing press», — said Pushkarev.