The ruble strengthened along with risky assets
The Russian currency grows by mid-day Thursday, followed by the recovery of demand for yielding assets in international markets.
USDRUB lose 25 cents compared to levels of closing of environment, down to 65.15 and returning to the levels of late last week. EURRUB losing 18 cents, down from 73.20. In both cases, we see the growth of the ruble from those levels, which in recent months began to look insurmountable.
The bi-currency basket of the dollar and the Euro against the ruble also set to decrease from the level of 69. In the case of success, this will be the third turn down from the region, which since last September has acted as a significant support level. Simply put, the approach to this mark and investors increased purchases of the ruble.
And it can’t break any fears of trade wars, deprive markets of the US and China are about 8% and 10% over the past month, neither oil collapsed in the last three weeks by 18%. The main driver is now seen as the demand for corporate bonds of major Russian companies in the calculation of the dividends. At the same time, the sanctions risks fade into the background.
In addition, investors stronger confidence that the world’s Central banks, as well as six months ago, will be able to breathe life into the rally in the stock markets by lowering rates.
Asia and Oceania have already been cutting rates, in the face of falling growth and inflation. The markets put in quotes for two rate cuts by the fed this year and expect that the ECB will also lower the rate (maybe today).
However, it should be remembered that the policy is a result of weak economic data, but markets do not remain fully protected against severe market corrections. This applies both to global demand in the stock markets and raw materials in General and of the ruble in particular.
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