The ruble is in a fever against the background of rising us dollar and weak Outlook

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World currencies are under pressure due to the difficult situation on the US stock market, where yesterday has fallen by 4-5% and above (GE, whose bankruptcy due to unaffordable debt loads have ceased to speak exclusively in the form of jokes) shares of tech giants Apple, Amazon and many others. It is surprising that the English analysts very often speak only in the context of the specific problems of these companies and for the trees see the forest. It is obvious that the market behaves exactly as it is prescribed by the powerful hand of the fed.
While raising interest rates investors expect slowing economic growth, which, incidentally, can already be seen in the most sensitive to monetary policy real estate and mortgage loans. The market continues the Exodus into the dollar, the DXY index hit its highest level since may 1, 2017 at the level 97,30.
Today ratings Agency S&P decided to support their colleagues from Moody’s stating that the sovereign rating of Russia will not be revised in case of introduction of additional sanctions. The feeling of some verbal support from them – although, of course, it is not. However, the ruble did not react to the news, continuing the whole day traded in a narrow corridor 67,40-67,80 per dollar.
Since the beginning of the year, the domestic currency had weakened to a “green” 20%, although this is not the worst result among currencies of developing markets. Looking at these, I may say, the results, their background is much more amazing it seems to drop a single European unit of account the dollar by 9.5% over the same period. As they say, maybe something not so in Conservatory?
The prospects of the ruble further aggravate the vague tax policy of the government (Prime Minister Vladimir Putin instructed the Dmitry Medvedev to deal with the “fiscal burden of the citizens” and, in parallel, came the news that the Ministry of Finance, total tax exemption in the Russian economy in 2017 amounted to 30.8% of GDP), fears the deterioration of properties of the national debt (the amount of the next auction for OFZ Finance Ministry on Wednesday has not yet been confirmed, although the coupon bonds of the Central Bank (COBRAS) are already in a total volume of almost 1.3 trillion instead of 1 trillion rubles as before, that creates additional psychological canopy over “Ischemi”) and, of course, the situation with oil prices.
Speaking of the latter, despite statements by the oil Minister of Saudi Arabia on the eve of the launch of the next programme of reductions of the member countries of OPEC+ in the case of falling prices of a barrel below $60, the Outlook remains very bleak – especially against the background of the continued strengthening of the U.S. dollar.
Vladimir Rojankovski,
“International Financial Center”