The ruble is in danger of becoming epiderm Jan
The Russian currency once again reduced since the beginning of the day. At the start of trading on Monday, the ruble lost to the dollar on 24 kopecks, falling to 67.12. EURRUB pair added 34 kopecks, rising to 77.05. Markets increased traction in security after alarming indicators of foreign trade in China.
Emerging markets, as oil, from the end of December showed a rapid growth, retracing part of the losses fall. A sharp decline in imports and exports in China was the reason to lock in profits from a rally the previous days and provoked a new wave of pressure on the ruble.
Last week it was evident that the Russian currency is in no hurry to rush up, despite the increasing demand for risks, positive dynamics of oil and the strengthening of the other currencies of the commodity countries and developing countries, targeted by traders.
If the ruble will continue to feel “worse the market”, the pair USDRUB and EURRUB can begin active growth, confirming the status of January as one of the worst months for the national currency.
It is impossible to overlook the specific risks of the ruble in the form of a new wave of sanctions, as well as high uncertainty around the impact on inflation and the economy from the increase in VAT.
The return of U.S. lawmakers to discuss new laws against Russia is able to create a negative environment where the ruble will often react very nervously. In fact, the subject of sanctions since last year, causing the most dramatic movement of the Russian currency and is able to take her time to 10%. The VAT increase is proinflationary factor, and at the same time able to seriously inhibit economic activity.
The Bank of Russia can fight off inflation by raising interest rates: this factor though, and is positive for the ruble, still points to a General cooling of the economy. If the Central Bank tolerate inflation, it will undermine the value of the ruble, causing pressure on the quotes.
Thus, despite the strong start of the year and further progress is unlikely to be as cheerful, risking to leave the ruble among the outsiders – at least for the next few weeks.
Alexander Kuptsikevich Companies,