18.05.2022

Ruble stabilized against dollar and euro amid controversial external background

Anchoring the oil market above the level of $ 57 per barrel of Brent grades supports the ruble, but the growth of geopolitical risks in connection with Iran puts pressure on the rate of developing currencies, traders say.

The ruble on Friday afternoon stabilized against the dollar and the euro against a controversial external background.

The dollar exchange rate “tomorrow” settlements at 14.52 Moscow time increased by 1 kopeck, to 57.71 rubles, the euro rate decreased by 6 kopecks and was equal to 68.16 rubles.

RUBLE IN SIDE

The ruble against the dollar and the euro changed little on Friday amid conflicting external factors.

The main reason for this state of affairs was the expectation of investors for the speech on Friday by US President Donald Trump with a statement on a new strategy towards Iran. “The Trump administration’s policy towards Iran will resolve the totality of threats and hostile actions (emanating from Iran in the United States’ opinion – ed.) And will seek to change the behavior of the Iranian regime,” the White House said.

The growing geopolitical risks around Iran are putting pressure on emerging market currencies. On the other hand, these same fears are pushing up the cost of oil, since one of the US decisions may be to renew the embargo on the export of this raw material by Tehran, experts say.

In addition, on the eve of the weekend in such uncertain conditions, market participants are in no hurry to build up positions in any direction, which also constrains trading activity and narrows the range of rate fluctuations, traders note.

As a result, the dollar and the euro were changing in different directions against the ruble during the day within 0.15%. The ruble price of “black gold” has risen above the level of 3.3 thousand rubles per barrel.

FORECASTS

Against the backdrop of expensive oil, the ruble may receive support, which will be supplemented by the entry of exporters to the market with the sale of foreign currency before paying the main taxes on October 25, argues Vladimir Evstifeev from Zenit Bank.

“The ruble remains dependent on global demand for high-yielding assets. Taking into account the decline in inflation, real ruble rates look attractive, but the next escalation of geopolitical histories may restrain interest in the ruble,” he added.

The Russian ruble still has a chance to reach new heights by the end of this month, says Gleb Zadoya from Analytica Online. The fact is that the positive dynamics of oil prices supports the exchange rate of the Russian currency, he says .

“In addition, at the end of the month we will have a peak in tax payments and a meeting of the Central Bank, at which it is likely that the interest rate will be cut not by 0.25, but by 0.5 percentage points. This will support investments in the Russian public debt. However, break below 56-57 rubles per dollar for the exchange rate will be quite difficult. This range is a good level for purchases in the medium term. By the end of the year, we expect the dollar to rise to 59-60 rubles, “Zadoya said.

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