Outlook on the ruble: What the dollar and the Euro will be in may
The previous week could be a turning point for the Russian currency. The ruble by a large margin continued to hold the title of strongest currency since the beginning of the year, however the currency markets is not an endless trends. Investors have withdrawn funds from Argentina and Turkey and the Ministry of Finance of Russia – on the contrary, tried to use the market conditions, releasing the OFZ by a record amount. Last year we saw the fire in the financial markets spread into emerging markets in General and in the end weakened the ruble.
According to analysts at FxPro, after touching multi-month highs near 63.66 per dollar and 71.40 for one Euro, the national currency has been subjected to intense pressure even with a relatively neutral external background. Very often fly the ruble faces a slip in growth. It would not be surprising if similar dynamics will be repeated this time.
Among the factors pressure it is necessary to highlight the strengthening of the dollar on the world market. The dollar, often a symptom of problems in the markets, favouring the “protection” of liquid instruments over revenue. That is, when the growth of the U.S. currency, emerging markets and stocks often reduced.
In recent days, the US indices were hitting new record highs, but the overall market is too overheated. In such conditions the markets can be deployed to decrease at quite trifling at first glance reason. It seems that the positive ideas embedded in quotes: pre-played bargain America and China, and with it the shift of a Brexit, and loose monetary policies of the key Central Bank.
We should also highlight the trend in the decline of the single currency due to the weak macroeconomic statistics, and this trend may well be developed in the coming weeks. Europe’s weakness and the Euro is bad news for the ruble, which is closely linked with the economy of Europe.
The most likely scenario is the way to USDRUB 67: level which could be achieved by the end of may. The growth of the dollar risk is also reflected in the quotations of the single currency, sending the EURUSD straight to 1.08. In this case EURRUB fully able to be near 72.50 – i.e. at almost the same levels at which it was at the end of last month.
We can not exclude a more dramatic drop of the ruble, as the upward trend of the dollar is strongly negative sign. It is impossible to ignore the scenario with a touch of the dollar mark of 70 rubles, Euro – 80. As a result, in may, the ruble may lose all of their gains since the beginning of the year.
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