Dollar exchange rate. Forecast for August 3–4

Denis Buivolov,
analyst

Pressure on the national currency adds aggravation in geopolitics

Having lost its local support in the form of the July tax period and faced with the deterioration of the general market background and the strengthening of the global dollar, the ruble continues to look frankly weak. The pressure on the national currency is adding to the aggravation in geopolitics. The base movement of the ruble exchange rate is still determined by the ratio of limited inflow of foreign currency from exporters and increased demand from importers, investors and travelers traveling abroad. The bursts of exchange rate volatility can also be explained by the relatively low liquidity of the market. On Thursday, the Ministry of Finance will publish a report on oil and gas revenues in July and indicate the amount of foreign exchange transactions under the budget rule for the next period.

Egor Zhilnikov,
chief analyst

Favorable conditions in the oil market will contain the weakening of the ruble

The ruble weakening trend has been gradually forming since the end of July. In our opinion, the key pressure on the national currency continues to come from concerns about the imbalance of supply and demand in the market, caused by the lack of signals for improvement in the budget and current account. On the one hand, with such dynamics, the value of the dollar may move into the range of 95–96 rubles, where new levels of resistance can be traced. On the other hand, favorable conditions on the oil market will keep the ruble from weakening. It is worth noting that the demand for the currency remains stable in the face of limited repatriation of funds.

The key pressure on the national currency is exerted by fears of an imbalance in supply and demand

According to Zenith Bank, in the short term, the ruble weakening trend will continue. The key pressure on the national currency comes from concerns about the imbalance of supply and demand, caused by the lack of signals to improve the state budget and current account. The ruble may be supported by favorable conditions in the oil sector and additional sales of foreign currency on the market by the Central Bank. At the end of the week, the range is 92.3–92.8 rubles/$.

Maxim Timoshenko,
Director of Financial Market Operations Department

The weakening of the ruble is mainly due to the lack of support from the sale of proceeds by exporters

The current week began with the growth of the euro and the dollar. And by the middle of the week, the Chinese yuan also updated its highs in April last year on the Moscow Exchange. At the moment, the ruble is still under pressure from the imbalance of supply and demand for foreign currency on the market. The weakening of the ruble is mainly due to the lack of support from the sale of proceeds by exporters, who closed their ruble tax requirements at the end of last month. At the same time, imports are gaining momentum, putting pressure on the ruble exchange rate. The effect of rising oil prices and a decrease in the discount to the Urals brand, in particular, will be noticeable with a lag of about a month. Therefore, despite this positive background, this factor cannot currently support the national currency.

In summer, the population’s demand for foreign currency traditionally increases against the backdrop of the holiday season.

Until the end of the week, we are increasing the trading range to 93–96 rubles/$. Against the backdrop of a decrease in risk appetite in world markets due to the downgrade of the US credit rating by Fitch rating agency, the demand for hedging positions through the purchase of the dollar increased. For the Russian currency, there is an additional decrease in export earnings with a simultaneous increase in import flows against the backdrop of a gradual recovery in demand from the economy and the population. Also, in the summer, the population’s demand for foreign currency traditionally increases against the backdrop of the holiday season. These factors put pressure on the Russian ruble. On the other hand, we still believe that the factor of growing oil prices has not yet been fully played out in the national currency. In addition, a decrease in the level of geopolitical tensions, as well as an increase in risk appetite in the global capital markets, will lead to the stabilization of the exchange rate at levels below 90 rubles / $, but this is rather a medium-term perspective.