Step away from trade wars: the ruble and other risky assets under attack

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Thursday, July 5, in Europe, the U.S. currency is trading on the downside against other major currencies except the Japanese yen. The leaders of growth is the Euro. At the time of writing the single currency rose against the us dollar by 0.43%, the new Zealand dollar by 0.35%, the pound is down 0.26%.
The Bank of Russia from July 6 to set the official US dollar rate to ruble at the level of 63,2604 RUB that above the previous close by 3.37 COP. Official Euro to ruble exchange rate was set at around RUB 73,964 compared to the previous value rate increased by 25.67 COP.
During yesterday’s trading the ruble strengthened slightly against the US dollar and declined against the Euro. He rose against the dollar due to its General weakening in the Forex market and rising oil prices.
Support for the single currency had the highest value of the index of industrial orders in Germany, as well as news from Bloomberg that was published on Wednesday, July 4. It was reported that some members of the ECB governing Council considered a rate hike in late 2019 is too late.
High oil prices will continue to support Russian currency, but its decrease in influence of this factor will weaken. On Friday, July 6, Brent fell 0.51%. At the time of writing the review, the barrel is worth $77,13. The ruble has ignored the decline in prices before yesterday’s close of trading in the States, so tonight before the weekend may be under pressure.
Oil fell in the U.S. session after data on stocks of petroleum products in the United States. According to the U.S. Department of energy, the oil reserves in the country for the week ended June 29, increased by 1.25 million barrels to 417,9 million barrels (consensus: -5,2 million barrels). Gasoline inventories fell 1.51 million barrels (forecast was 2.5 million barrels). Distillate stocks increased by 134 thousand barrels (consensus: -250 thousand barrels). Oil production in the US has not changed, amounting to 10.9 million barrels per day.
The President of the United States Donald trump is also a major newsmaker. It has an impact on the exchange through their posts on Twitter. He immediately called on OPEC to reduce oil prices by increasing production. He believes that OPEC has done little to help reduce gasoline prices.
The focus of market participants remains the subject of trade relations of the USA with other countries, as well as the publication of the report on the labor market in the United States. On Friday, the States will impose tariffs on imported goods from China. Chinese customs has warned of retaliatory measures. New Chinese duties on American products will begin to act immediately after the entry into force of the tariffs of Washington. A trade war will have a negative impact on risk assets and the ruble.
Report on the labor market has a strong influence on the greenback.
The effect of it lasts about one hour. So for the domestic currency market report uncritically. Impact on ruble pairs. For the pair dollar/ruble remains the trading range 62,95-63,60 RUB Fluctuations in the Euro/ruble should be expected between the levels of 74.30 73,40 and RUB.
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Vladislav Antonov,
Analyst
Alpari