Ruble: Will the dollar and Euro 70 for 77?
The Russian currency shows very modest gains this week, remaining near key levels against the dollar and the Euro. However, it’s more like a delicate balance, rather than the desire of the ruble to catch my breath after upgrading the highs to the currency.
So, USDRUB last week marking below 63, while on Thursday afternoon at 62.82. EURRUB traded around 70.65, and the player attempts within the day to push the pair below 70.50 time after time fail. In spite of that, the ruble remains the strongest currency against the dollar, securing a position with the beginning of the year. And yet, on the horizon, dark clouds.
For the Russian currency, the topic of sanctions is in the first place. The Americans were in no hurry to introduce new restrictions and the ruble used it in their favor. However, this background, as we see, has already been laid in quotes and will not continue to act as a reason for shopping RUB.
The second most important factor influencing the ruble is the General mood in the world markets. Investors keep faith in the fact that key Central banks will save the world economy from the recession, pumped the financial system with cheap money through low interest rates. However, stock indices and currencies of developing countries is unlikely to avoid a serious sell-off.
Soft policy supports markets in the long term from six months to several years, without eliminating the powerful decline in the short term. In addition, the Central banks follow the markets, avoiding to come to the rescue before the start of a major correction. Perhaps now key players be afraid to make a false start.
The third most important factor is oil. She lost 6.7% last week, reversing after the softening of the rhetoric of the US on Iran and higher than expected stocks and production. Further weakening Brent could continue to cut the ground from under the feet of the ruble.
Note that in the previous months, the Russian currency jumped higher than his head, which makes it vulnerable to correction. It would not be surprising if the rate will “grow heavy” in the second half. Those drivers that pulled him up, exhausted. Further, the trend can change, sending the ruble to 70 to the dollar and 77 per Euro at year-end.
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