The ruble pushes up the panic, the expert predicted two scenarios
The panic in the market strongly pushes the demand for foreign currency liquidity up. The dollar and the Euro soaring.
The pair dollar/ruble on 8 August moved out of range 61-65 and at the moment, testing the level of 67, steals up to a mark of 68. This shows the entrance to a new trading range 67 – 70.
Earlier American Senate has described Russia as “state sponsor of terrorism”. Last week it became known about the new anti-sanctions associated with “Russia’s use of chemical weapons in Salisbury”.
The first phase will take from 20 August to ban the import of devices that can be used for military purposes. The second stage will enter into force 90 days and implies a ban on flights of “Aeroflot” in the USA and stop any supplies in the United States. In this second stage may be excluded if Russia guarantees not to use chemical weapons and give access to UN representatives to carry out inspections. This bill will limit freedom of action in foreign policy.
As stated by the Prime Minister of Russia Dmitry Medvedev, the new sanctions will eliminate the possibility to establish relations between Moscow and Washington and, in fact, is nothing but a Declaration of a trade war. “And this war must be responsive — economic means, political means, and, if necessary, by other methods. Our American friends must understand that”- said the Prime Minister.
The bill will deal a major blow to the oil sector, implies a prohibition of the supply of technologies and any financial support of Russian oil companies.
Last week of all things past, it became known that the Congress adopted the document with a list of measures, including against the national debt and state banks.
The new sanctions will significantly worsen the standard of living of the population, especially vulnerable will be the middle class. It is possible that this will lead to mass anti-government rallies.
In the current conditions for the Russian currency there are two scenarios
The first is more optimistic: the price overcomes the mark of 67 and is committed to the target level of 70 rubles per dollar. And there is no certainty that the preparation of the tax period, in terms of the risk of sanctions will be able to support the domestic currency.
When more stringent scenario, the dollar / ruble exchange rate can exceed 71. In this case, by the end of the year we can see the purpose of 78. The execution of one and the second scenario looks quite probable. Everything will depend on how worse the situation is.
Larson & Holz