Currency frontier: how can change the courses of the dollar and the Euro in dekabristochka link
Monday, 2 December, the ruble on the Moscow stock exchange shows mixed against the dollar and the Euro. In the near future the attention of investors will be chained to the trade negotiations between the US and China, as well as to the summit of the countries participating in the agreement OPEC+, experts say. Analysts do not exclude that the currency can maintain a record inflow of investments in Russian debt securities market. How can change the courses of the dollar and the Euro before year-end at RT.
- © PHILIPPE HUGUEN / AFP
At the beginning of the trading session on the Moscow stock exchange on 2 December, the dollar rose 0.18 percent, to 64.4 rubles, while the Euro — by 0.2%, to 71 rubles. However, by mid-afternoon values fell to 64.2 and 70.8 rubles, respectively.
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The official exchange rates of the Central Bank on 3 December was 64,41 rubles per dollar and 70,97 of ruble per Euro.
Until the end of the month, the attention of the currency market players will be focused on the development of trade relations between the US and China. In an interview with RT said financial analyst «BCS Premier» Sergei Dejneka.
In October, Washington and Beijing has once again stepped up negotiations on the trade agreement and end the tariff war. In November, the President of the United States Donald trump said about the possibility of signing the first part of the Treaty in the near future. Meanwhile, the American President has threatened China’s new increase in rates in the event of another failure of the transaction.
Traditionally, the growth of geopolitical tensions in the world investors sell off risky assets. According to Sergei Deineka, this development may put pressure on the Russian currency. However, even in the event of a trade war, the ruble will continue to be more attractive currencies of developing countries.
«If the decision on the first phase of a trade transaction will take in 2020, and the US from December 15 to raise tariffs on Chinese goods, the currencies of developing countries can end the year on a sad note. The ruble is favorably risky counterparts due to the strong macroeconomic factors of Russia — a large amount of reserves and low public debt,» — said the expert.
The oil excitement
According to RT interviewed analysts, until the end of the year, the dynamics of the ruble to a certain extent will depend on changes in oil prices. In recent days, the price of energy commodities benchmark Brent crude fluctuating in the range of $60-64 per barrel. As expected, the key factor for the quotations will become the summit of the signatories to the agreement OPEC+. The event is scheduled for December 5 in Vienna.
If the parties to the transaction for the freezing of oil production will decide to further reduce the production of hydrocarbons, the commodities can grow and thereby to support the ruble. In an interview with RT told the chief strategist of «UNIVER Capital» Dmitry Alexandrov.
«Is that the ruble is supported investors’ expectations that participating countries of the agreement on OPEC+ will reduce the level of oil production by 400 thousand barrels per day,» — said the expert.
At the same time, Aleksandrov admits the decline in oil prices in the case of aggravation of relations between China and the United States. If Washington will not be able to negotiate with China, the trade war will increase and the global demand for energy sources is considerably reduced. As the analyst, this development could weaken the national currency.
- © Nick Oxford
However, the impact of commodity quotes on the ruble will be limited by the fiscal rule, which provides that during the rise in oil prices, 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 prices.
Recently the implementation of fiscal rules have weakened the correlation between ruble and oil, so the currency market players were less likely to respond to changes in commodity prices. In an interview with RT told the head of group of analysts CAPT mark in real.
«The dependence of the ruble on oil prices persists, but to a lesser extent than in previous years. For example, in recent days, oil has fallen in price on 3,5%, and the ruble to the dollar — only by 0.8%,» — said Goikhman.
In General, the end of the year support the ruble will have a record inflow of investments in Russian debt securities. According to the Central Bank, since the beginning of 2019 the total market for Federal loan bonds (OFZs) increased by nearly 1.53 trillion rubles, and for the first time, observations made up 8.86 trillion. The amount of foreign investments increased by more than 1 trillion rubles, and also reached a historic high of 2.84 trillion. In General, the share of foreign investors accounted for almost a third (32%) of all purchases of OFZ bonds.
«The interest of foreign investors in government bonds, giving a higher yield compared to developed markets remains a positive driver for the ruble with a budget surplus, rising international reserves and declining external debt of Russia», — said mark in real.
However, in December on the ruble may impact seasonal factors. According to Goihman, in the last month of the year in Russia traditionally increases the demand for foreign currency, and the rouble starts to weaken.
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«The growing demand for foreign currency associated with pre-Christmas imports and trips of Russians abroad. In addition, in the previous months, there have been delays in spending the budget funds on national projects launched in 2019. In December, we planned more large-scale funding of national goals that will increase the supply of rubles on the market and reduce the rate of national currency», — said the expert.
In addition, the pressure on the ruble may have the payment of the Russian external debt. According to Dmitry Aleksandrova, to perform obligations of financial power at the end of the year to sell rubles and buy them foreign currency.
However, the interviewed experts do not expect sharp fluctuations of the national currency in December. As suggested by Sergei Dejneka, in the next month, the dollar will remain in the range of 64.5—66 rubles and the Euro near 71-72 rubles. Similar estimation is shared by the mark in real.
«We can assume that although December will be the month of weakening of the ruble, but the speaker will not be very strong. The maximum level for the dollar will be the turn of 65-66 rubles», — concluded real.