The ruble finally surrendered under pressure from the rising dollar and the Euro
Thin holiday market is playing a cruel joke with the ruble. In the currency section of the MICEX trades, however, the dynamics of the Russian currency is more like a one-way street. In the absence of many players, and the amplitude is dramatically increased. So, USDRUB rose to 65.50 levels where a couple of months ago turned to decrease. EURRUB rose to 73.17 also returning to the levels at the beginning of April.
Brent crude on Thursday fell below $70 per barrel: all to the same lows from the beginning of April, as the ruble. However, the relationship in this case is not so much that the ruble is the oil, and that they all follow the dollar.
The U.S. currency continued to develop the upward trend due to the relatively strong macroeconomic data. Because of this, the assets in dollars are becoming more and more attractive to investors. This movement received a new impetus in mid-week after the fed meeting.
However, Friday’s report on US labor market (NFP) is able to question, or, conversely, to increase the growth trend of the USD. As expected, in April the U.S. economy created about 180 thousand jobs, which is insignificantly less than the average monthly increase in the last 12 months (211тыс). During the week out contradictory data: ADP said the strong employment growth in the private sector, but a week of applying for benefits and PMI in the manufacturing sector note cooling in the growth rate compared to previous months.
Additionally, there is a drop in sales in the automotive and housing market of the USA, which is indirect evidence of declining consumer confidence.
Thus, from the macroeconomic data more evidence that the situation in employment becomes slightly more cool. It can become a serious obstacle to the development of the dollar.
To a trade-weighted basket of 6 major currencies, USD last week rose to 2-year highs. For the development of a very long trend, today’s Nonfarm Payrolls will have to significantly exceed market expectations. However, indirect indicators indicate that the actual value will be “slightly worse than average”, potentially creating space for a rollback of the American currency.
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