The fed statement did not inspire the dollar, but strengthened the ruble

  • And
  • +A

Wednesday, March 21, at the end of the trading session on the Moscow exchange rate of the us dollar calculations “tomorrow” fell by 65 kopecks (-1,13%), to 56,86 rubles, Euro – by 22 kopecks (-0,38%) to 70,19 RUB Trading volume in the pair dollar/ruble amounted to $3.2 billion (-3,03%), and Euro/ruble – 298,1 million euros (-37,57%).
The Central Bank of Russia of 22 March has set the official US dollar rate to ruble at the level of 57,4954 RUB below the previous day 20,79 COP. the Official Euro to rouble was fixed at RUB 70,5699 compared to the previous value rate decreased by 66,48 COP.
In the first four hours of trading on the domestic currency market the ruble was mixed. For background updates-week high at a cost of Brent crude oil and the subsequent growth in oil prices resumed and the purchase of the ruble for foreign currency.
Additional support for the ruble came from auctions of the Ministry of Finance of the Russian Federation and the growth index of government bonds of Russia (RGBI). The Agency has placed two issues of OFZ for a total amount of RUB 30 billion, the Aggregate demand for paper was 90,15 billion. The RGBI index increased 0.21% to 144,90.
Then the position of the ruble has significantly strengthened the weekly storage data from the US Department of energy and the President of the fed Jerome Powell at a press conference.
Over the past week from 10 to 16 March in the US oil stocks declined by 2,622 million barrels to 428,306 million barrels (consensus was +3,182 million barrels). Gasoline inventories decreased by 1.7 million barrels to 243,1 mln barrels (consensus: -1,4 million barrels), distillate inventories by 2 million barrels to 131 million barrels (consensus: -1,8 million barrels). Oil production increased by 26 million barrels to 10,407 million barrels per day.
On the background of General weakening of the dollar before the announcement of the decision of the Committee on open market operations the fed (FOMC) at the rate market participants have ignored the increase in oil production in the country. The fed raised the rate on Federal funds by 0.25% to 1.5%-1,75%.
The U.S. financial regulator has retained the forecast for rates for the year 2018 no change (scheduled three raises), and in 2019 is expected not two, but three raises. Since the rate increase was included in the quotes earlier, the market participants expected that the FOMC will point to four rate increases this year, but when their expectations were not met, the dollar reacted by falling all over the market.
At the end of trading on Wednesday the pair dollar/ruble fell by 1.13%, to 56.88 RUB, EUR/RUB – on 0,31%, to RUB 70,19 Against the Euro, the rouble has risen in price less, as the Euro demand on Forex.
Thursday, March 22, in Asia, a barrel of Brent lost 0.4 percent. Most of the major currencies on Forex are traded against the us dollar in the black. In this regard, the opening of trading on the Moscow exchange is expected a slight growth on ruble pairs.
Because of rising oil prices and dollar weakness, the scales began to lean toward the ruble. I think that this is a temporary phenomenon, and after the peak of tax payments (March 26) the weakening of the ruble will resume. Besides, we heard rumors that OPEC may change the deal. If they are hyping in the media, the price of a barrel of Brent will drop to $65. Accordingly, due to geopolitical risks and declining oil prices, the ruble will be under pressure.
Keep our finger on the pulse, because the recovery of the pair dollar/rouble to a mark 57,45 RUB over the “American” buyers will return to the force. My goal for the dollar on Thursday closing is in the range of 57.20-representing 57.30 RUB EUR/RUB today will reach 70,60 rubles per unit European currency.
___________
Vladislav Antonov,
Analyst
Alpari