Dollar exchange rate. Forecast for July 20–21

Egor Zhilnikov,
chief analyst

As part of the next trades, the dollar will continue to consolidate in the upper part of the range of 90-91 rubles.

The market formed a balance between supply and demand, while trading activity remained low. We believe that market participants are in no hurry to open positions, waiting for new significant signals. At the same time, according to our estimates, the ruble remains oversold both from a technical and fundamental point of view. It is worth noting that the recent sharp decline in the US currency on global markets was ignored by the dollar-ruble pair. We believe that within the next trades the dollar will continue to consolidate in the upper part of the range of 90-91 rubles. against the backdrop of a relatively stable external background and the formation of a growing trend in oil prices.

The Russian currency continues to receive support from gradually recovering oil prices

We keep our forecast for a possible slight strengthening of the Russian currency against the backdrop of the meeting of the Bank of Russia on the key rate, which will be held on Friday. An increase in the rate will increase the yield of the bond segment of the Russian market, which may stimulate some investors to start gradually reducing their currency positions in favor of buying ruble bonds. Thus, the yield on five-year OFZs is at the level of 10.4% per annum, which is quite an attractive value. Let’s add that at the moment the yield on one-year OFZ increased to 8.3% per annum. This reflects the expectations of market participants to raise the key rate on Friday to 8.25% per annum. Also, the Russian currency continues to receive support from the gradually recovering oil prices on world markets. Brent oil is already trading above $80 a barrel, but against the backdrop of Russia’s voluntary supply cuts, this will have less of an impact than before.

Denis Buivolov,
analyst

The key event of the week remains the meeting of the Central Bank of the Russian Federation on Friday

The Russian currency at the beginning of the trading week lost some of its positions, correcting in the range of 91-92 rubles per dollar. Even the growth of oil prices did not help the Russian currency. The key event of the week remains the meeting of the Central Bank of the Russian Federation on Friday, following which the consensus forecast suggests a rate increase of 0.5 percentage points. We believe that in the absence of any significant events, the Russian currency will continue to trade until the meeting of the Central Bank of the Russian Federation in the .5–92 rubles per dollar.

Maxim Timoshenko,
Director of Financial Market Operations Department

The dollar may be affected by the publication of data on the number of building permits issued in the United States

The ruble is in an area of ​​increased volatility against the backdrop of exacerbation of geopolitical events. In turn, the ruble is supported by rising energy prices, the fall of the dollar index on the world market, and, undoubtedly, the approaching peak of new payments plays on the side of the ruble. The expected increase in the key rate of the Central Bank at the meeting on July 21, although generally positive for the national currency, but in the current realities of the lack of players in the carry trade, this impact can be severely limited. The dollar may be affected by the publication of data on the number of building permits issued in the US and the weekly report on stocks of oil, gasoline and distillates of the US Department of Energy. In addition, the US dollar takes into account the published data on the weakening of the US retail sales growth and the unexpected decline in industrial production.

Vladimir Evstifeev,
head of analytical department

Oil prices and the weakness of the US currency provide support

The ruble is consolidating against the dollar in the range of 89–92 rubles. and is clearly not ready to implement another recovery attempt. Oil prices and the weakness of the US currency provide support, as does the improvement in global sentiment around emerging economies. The main event of the week will be the meeting of the Central Bank of the Russian Federation. Increase in the size of the key rate by 50 bp. p. is unlikely to elicit a reaction from the ruble, but a larger upside move or a noticeable tightening of rhetoric (including in the updated medium-term outlook) could improve the ruble’s position.