The ruble began the new week’s failure against the dollar and the Euro
The Russian currency in early trading on Monday, losing more than 40 cents. So, USDRUB rose to 65.48 and EURRUB until at 73.55. In both cases, the dollar and the Euro approached the upper boundary of the trading range, which was formed on may holidays. Then the dollar fluctuated between 65 and 65.50, while the Euro hovered around 73.
However, the return of the players after the holiday lull may coincide with a new wave of pressure on the ruble on global platforms.
For example, declining demand for risky assets, which is a serious precursor to the depreciation of the Russian currency. Important indicators of this demand, USDJPY and AUDUSD – are now below 110 and just 0.700 respectively, which may indirectly indicate an increased alertness of players.
At the same time, global stocks slide down, fears of a trade conflict between China-USA and their consequences for the economy.
Among the fundamental factors it is necessary to highlight the increase in purchases of foreign currency by the Central Bank on the balance sheet of the Ministry of Finance. It turns out that now the market has a “powerful seller of the ruble,” and its impact in the coming months will emerge with particular force. In addition, low inflation and weak growth rate of the economy, combined with relatively strong since the beginning of year the ruble, creating space for easing policy in June, the Bank of Russia.
Positive dynamics of oil, on the other hand, constrains the possible weakening. Brent last week received the support on the decline at 70, and now begins a week of growth, from the level of 70.70. In addition, from the technical analysis, there is a clear signal to buy the asset, since the 50-day average rose above the 200-day, and the graph was above these lines. This combination is considered a strong bullish signal for Brent in the near future.
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