The rouble has potential for growth, but realize it is difficult

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The Russian ruble has lost over Tuesday 9 cents to the dollar and the Euro 19. The USD / RUB pair rose to 62.15 and EURRUB to 72.80. The main causes are the weakening of oil and the selectivity of markets in terms of demand for risky assets. In this micro-trend is clearly manifested trend of flow of funds in the strong paper and out of the weak.
General optimism has faded into the background, bringing forward a pragmatic approach based on fundamentals. In particular, news from Italy, triggered a new round of sales of its debt with rising yields on 10-year bonds with a 2.54% to 2.8%. Also continuing the sale of MXN (-1.4% against the dollar per day). In this position of the other commodity currencies (CAD and AUD) strengthened. Yield protective securities in the United States and Germany during the day decreased by suppressing the dynamics of securities of the financial sector.
The economic situation in Russia is in favor of the stability of the ruble, therefore, moderately positive start of trading environment re-opens prospects of growth of the ruble is closer to 62.0.
Italy weighs on Euro
Despite the fact that Italy had ceased to be a cause of turbulence in global financial markets, political problems of the country do not leave the peripheral attention of the players. Italy is a large country Euro-region, so even without the threat of withdrawing from the EU budget and economic policy will remain the focus of markets will have a direct impact on the Euro.
The plans of the new government suggest impressive growth of budget expenditures, which discourages investors because of the huge debt burden of the country and anemic growth (about 0.5% per year on average over the last 20 years). However, while the single currency gradually recovers the losses suffered in the end of last month.
IT pushes the markets up
Stock markets continue to strengthen under the flag of high growth companies. Nasdaq the second day to a number of fixes maximum levels of closure. Asia comes next, also locking in the morning the growth of under 0.5%. At the same time, financial sector stocks once again under pressure due to the reduction in yields of “safe” bonds.
In the currency market, the dollar index fell Tuesday by 0.2%, EURUSD overcame 1.17, while GBPUSD managed to climb up to 1.34, while USDJPY gets to 110.
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Alexander Kuptsikevich,
Financial analyst,
FxPro