04.07.2022
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The ruble has updated multi-year highs at the end of trading

MOSCOW, May 20 – PRIME. On Friday, the ruble continued to grow steadily against the dollar and the euro and once again updated the highs for several years against the dollar and the euro, testing the psychologically significant support of 60 rubles in both currencies. She has endured for now.

The ruble rose against the backdrop of an increase in trading volume

A noticeable increase in the volume of foreign exchange trading may indicate that some European consumers are paying for Russian gas under a new scheme – with the participation of Gazprombank, which converted the currency into rubles, experts believe.

The dollar exchange rate with settlements “tomorrow” at 19.00 Moscow time (to close) fell by 1.67 rubles, to 60.23 rubles, the euro – by 1.6 rubles, to 62.8 rubles.

During Friday’s trading, the dollar fell to 57.08 rubles – the lowest since March 2018, the euro – to 59.02 rubles – since June 2015.

During the working week, the dollar fell by 4.32 rubles, the euro – by 4.35 rubles.

The volume of trading in the US currency with “tomorrow” settlements amounted to a record $3.2 billion since the beginning of March, European (as on Thursday) – about 1.7 billion euros against several hundred million in previous days.

RUBLE CONTINUED THE RALLY

On Friday, the Russian currency market was dominated by a steady strengthening of the ruble against the dollar and the euro. The ruble continued to win back the factor of a large surplus in the balance of payments of the Russian Federation against the backdrop of collapsed imports.

The approaching peak of the tax period (May 25) traditionally increased the supply of foreign currency, since it requires players to accumulate ruble liquidity, which becomes difficult in the face of a depreciated foreign exchange rate. In May, 2.59 trillion rubles are expected to be transferred, which is equivalent to 43 billion dollars with a daily volume of 1.5 billion dollars in trading with settlements “tomorrow”.

The Bank of Russia continued to soften trading rules and lifted the ban on short selling on the stock exchange for individuals and the ban on buying foreign currency with borrowed funds (“leveraged”). However, market players ignored this, and there was no strong activation of the currency purchases. However, by the evening it moved up from the lows by more than 3 rubles.

The oil market slowed down in growth and in the evening lost 0.5% to $111.5 per barrel of Brent. On the oil market on Friday there is an ambiguous price dynamics.

On the one hand, investors continue to assess the situation around coronavirus restrictions in Shanghai. Despite the authorities’ desire to lift restrictions from June 1, a surge in diseases in other cities is reducing demand for fuel. On the other hand, the markets are watching the situation with the EU oil embargo against Russia.

As a result, the dollar fell against the ruble for the day by 2.7%, the euro – by 2.5%. The ruble price of oil amounted to about 6.7 thousand per barrel of Brent.

FORECASTS

The forecast for the dollar for the next week is 58-66 rubles, estimates Denis Buivolov from BCS World of Investments.

“The main factor behind the ruble strengthening is the fulfillment by exporters of the standard for the sale of 80% of foreign exchange earnings. The volume of incoming foreign currency still clearly prevails over demand. Imports remain tight, outbound tourism flows modest. At the end of the month, the preparation of companies for tax payments is added to this. We do not rule out that in the near future the regulator will take further steps to ease foreign exchange controls, for example, the standard for the sale of foreign exchange earnings for exporters may be reduced to 50%,” he adds.

As for the lifting of the ban on the purchase of leveraged currencies from June 1, in this way the regulator is trying to solve the problem of a strong ruble, trying to increase demand for the currency, Mikhail Shulgin from Otkritie Investments argues. Volatility has indeed come down in recent weeks and margin trading can support liquidity, he said.

“Meanwhile, the overhang of currency supply remains significant. The decisions taken do not look capable of completely stopping the strengthening of the Russian currency. A truly effective measure that looks capable of returning the exchange rate to the range of 70-80 rubles per dollar in the medium term is the restoration of imports. However, this is not the prospect of the coming weeks or even months. The ruble could be stabilized by abolishing the requirement to sell foreign exchange earnings in the currencies of friendly countries. It seems that this decision is looming on the horizon, ”adds Shulgin.

Source: 1prime

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