The ruble is not hopeless, but the risk of further decline is high
Despite the fact that the rouble has moved away from the lows reached after the introduction of the April sanctions, the Russian currency as a whole is not the best way. The ruble remains weak and vulnerable, despite the fact that oil runs in fresh highs by the end of 2014.
Reduce the attractiveness of our currency caused not only by the sanctions and the continuing threat of new restrictions, although this factor would definitely deter speculators, despite the fact that a significant impact on the economy, sanctions do not have.
Players are aware that the chances of warming relations with the West, and so Russia will remain in the grip of international political isolation, with negative for Russian assets in General from the point of view of foreign investment.
In addition to the effect of the sanctions, the ruble is suppress the dollar, which gained strength in the Wake of the revival of the faith of the market in a more aggressive fed tightening. The growth rate of wages in the United States do not live up to expectations, but this figure is considered in the broader context and at the current rate does not alter the trajectory of policy of the Central Bank who believes in the acceleration of inflation. Meanwhile, the employment rate hits record 18 years ago. In these circumstances, the fed can afford a more distinct “aggressive” hints that will be regarded as a factor reducing the attractiveness of assets in developing countries, including the ruble.
It is also worth to monitor the dynamics of quotations of oil. Despite the fact that at this stage the rise in price of black gold has the desired effect, in the case of a more significant bullish breakout, we can see “response” on the part of the rate of our currency, especially in combination with the upcoming tax period, unless, of course, by this time in the geopolitical arena is not going to happen new shocks.
Head of analytical Department,
“International financial center”