Ruble: the Expert described the main causes of the fall of the future
Reacting is not enough soft rhetoric of the fed, which has triggered a widespread rally in the dollar, the ruble slipped sharply at the start of trading on Thursday. Couple quotes at the time noted at 3-week highs near 63,90 RUB, but being dangerously close to the mark 64 RUB, then bounced. However, before closing the morning bearish gap our currency is still far, downside risks remain as markets digest the message of the fed.
If we talk about the longer term, in August, the probability of further weakening of the ruble. First, it is historically a difficult month for the Russian currency, which is under the negative influence of current account and seasonality, largely linked to the payment of dividends in the corporate sector. Second, just yesterday the dollar got support in the form of mixed signals from the Federal reserve, which did not call the reduction in the rate of the beginning of a cycle of monetary easing. More discreet tone of the regulator is generally negative for risky assets, including the ruble.
Third, dynamics in the oil market is unstable, and given trump’s desire to lower gasoline prices ahead of the election in 2020, market participants will be waiting for the catch with this front that will keep gusts of buyers. Fourth, the next round of trade negotiations, the U.S. and China did not bring significant results. Moreover, the next round was rescheduled for September that will keep the markets in suspense during August.
Thus, in the future, this month the dollar may rise to the level of 65 rubles, or even higher if these factors, added to the tightening of sanctions rhetoric by the West.
Academy of management Finance and investment