The ruble is unlikely to avoid further decline
World stock markets continue to climb after the failure a week ago, but foreign exchange market still gives alarming signals. Protective currency continue to attract increased demand, while the “profitable” again, the ruble is losing ground. The ruble adds 14 cents to 65.41 at the beginning of Monday and trying to get above 65.50. While EURRUB marking just above 73.05.
Over the past week the Russian ruble has lost about 1% against the Euro, reaching 73.10. The dollar almost remained unchanged at 65.40. and 65.70. However, if you look closely at the dynamics of the ruble within weeks, it becomes obvious that it is a relatively quiet movement contains disturbing symptoms.
A new week could be very significant for the ruble, which has already reached the lows since April, because August is still not the best month for the Russian currency. As a rule, closer to the beginning of the fall market begins, the vast majority of corrections, confirmation of what we’ve seen in the last decade. And it concerns not only the default of 1998, the collapse of 2008 or 2014, but less deep drawdowns such as in last year, when the ruble lost 13% almost a month.
Attracts attention and the force of the impulse with which the Euro for the first three trading days of August has risen in price on 3 roubles. Such sudden movements are often a signal of a fundamental trend reversal. In the case of ruble – reversal from growth to decline.
It’s not so much unconscious fear of traders before the August uncertainty. Rather, global markets prefer to aspire in the direction of their profitable assets to safety, in light of the escalating trade wars. As you remember, the yuan has crossed the threshold of 7.0 per dollar, gold jumps to $1,500, and the franc and yen still add about 3% since early August (and that’s a lot for “safe havens”). All together, this furnishes a very negative setting for the ruble.
Thus, by the end of the beginning of the week the ruble can overstep the mark in 66 per dollar and 74.50 per Euro (EURUSD forecast assumes growth to 1.13 against the background of the weakening U.S. currency). Even worse that the way to this territory can significantly accelerate the further weakening of the ruble.
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