The ruble and the Euro: points of growth is not defined

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As expected, the last couple of days on the Russian markets began to reign a great calm. Of course, it’s clear that investors are waiting for today’s meeting of the Central Bank of the Russian Federation to determine the key interest rates, however, in our opinion, they put too much trust on the formation conditions of some significant changes in this regard. But what if it’s routine and mundane and nothing new we hear?
Of course, the main intrigue – will maintain or increase the regulator’s key rate. Most colleagues guess that the obvious reason to change now, no.
Moreover, markets are tensed, when a month ago, the Central Bank announced the possibility of resuming currency purchases on the exchange in Russian funds, and even if today this topic willingly Nabiullina will not be affected, there is no doubt that many interested parties still to be picked up.
Meanwhile, after yesterday’s controversial ECB meeting European stocks and the Euro retain a surprising stability. Whether the markets have once again decided to act on the principle “buy on expectations, sell on the news”, or just decided to discount the importance of this event, not expecting to hear anything new from the mouth of Mario Draghi.
Mario Draghi understands that further Supersoft rhetoric is very harmful to the Euro – and indeed, investors believe that he still has “all the tools are in his toolbox (as he likes to say)”. So no one is surprised promises of imminent collapse of quantitative easing in the Eurozone. Another question – is it possible in the current conditions in reality?
In my opinion, hardly – at least, without serious negative consequences to not succeed. The European economy, unlike the US economy is growing at one and a half percent per year, and the unemployment rate in the peripheral PIGS countries over 18-20%. One in five young Spaniard after University or College can not find work in their field, that is, cannot serve the needs of his future family. To tighten monetary conditions in such a situation means to provoke new uprisings in the region, such as those now taking place in France.
Today, on the heels of statistics began to emerge with faster indicators for the Euro area, and she also did not bring any new hopes for the residents of the Old world. Thus, the index of business activity PMI in the Eurozone in the manufacturing sector in December fell to 51.4 compared with a consensus forecast of 52, and in the services sector fell to 51.4 vs anticipated of 53.5.
The rouble on this background, as mentioned above, it remains neutral, focusing on the lingering anticipation of the new supporting pillars of the financial regulator. As of 12:45 GMT it was trading around the middle of its range changes, Dec 66-67 rubles per dollar at the level of 66,49, fainting from the opening by 0.35%. In tandem with the Euro is also significant exchange rate movements is not observed, and the ruble is trading at 75,07.
Vladimir Rojankovski,
“International Financial Center”