The ruble is ready to fall on the sanctions rhetoric

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After two days of profit-taking in return, the sanctions theme, the Russian market passed to growth on Friday, following the example of the Western areas. The rally in risky assets continued on a wave of optimism concerning the trade negotiations, the U.S. and China, and additional support to our assets has increased oil prices to new three-month peaks. So, at the end of the session, the index Mosberg got 1.2% and the RTS – almost 2%. The ruble rose against the dollar and the Euro within 0.4%.
Over the past week the ruble against the dollar fell by 1.5%. Given the aggressive sanctions rhetoric, the fall looks quite modest. Part of the negativity was offset by the rise in oil prices by 6.5% for the week.
Despite the positive sentiment in the market of black gold in the segment of risky assets in General, “the Russian” is unlikely to return to sustained growth in the coming days, although these factors, coupled with the beginning of the tax period can cushion a fall on the background of the actions of the West. The EU agreed on new sanctions against Russia in connection with the incident in the Kerch Strait, which can be sounded already today, during the meeting of foreign Ministers of the EU. According to some, the list will be eight individuals.
If we talk specifically about these sanctions, they have rather a moral pressure on the Russian market, which is much more concerned with the bill providing for the imposition of restrictions for the banking sector of our country. However, investors may be hope: it became known that the American senators have proposed a new version of the bill on the next anti-Russian sanctions, which involves the easing of restrictions against several creditors.
Amid all these rumors and speculation downside risks for the ruble are saved, but still a serious threat of collapse is not. In addition, the demand for the dollar is showing signs of fading in the Forex market that can also play into the hands of our currency, which will now have to maneuver in the flow of the sanctions rhetoric.
Gennady Nikolaev
Academy of management Finance and investment