The restoration of the ruble – a temporary phenomenon

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The ruble has accelerated the restoration of the currency basket towards the end of trading Friday, paired with the Euro exchange rate has strengthened by almost 1.3%, reflecting the situation on Forex where the dollar has moved to the active growth against its main peers. The pair dollar/ruble settled below 67,50 RUB and EUR/RUB closed at 78,20 RUB.
Local rebound of the Russian currency was the result of a temporary relief to the developing areas on the background correction in the Turkish Lira and some stabilization of the Argentine peso. However, this is only a lull, and the overall picture in this segment still points to the threat of widespread crisis. This factor, in addition to internal pressure, will prevail over the ruble and strengthen the outflow of capital from Russia as the worsening situation, to correct which the authorities EM-countries will not be so simple.
Negative adding corrective signals from oil market. Brent mostly consolidated on Friday and is trading with a slight bearish bias in the morning session Monday. Key resistance remains local level 78. Drilling activity in the U.S. rose last week, holding back the enthusiasm of buyers, who now fear an increase in reserves and production from shale deposits. If the current consolidation will end in a full-fledged correction, timid attempts recovery of the ruble will come to naught. Also our currency is subject to pressure from the attitude towards risk, which continues to deteriorate against the background of aggressive rhetoric trump.
Igor Kovalyov,
InstaForex companies group