Dollar exchange rate. Forecast for July 6-7
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The weakening of the ruble is caused by an increase in demand for currency among major players
In our opinion, the weakening of the ruble, which has persisted since the middle of last week, is caused by an increase in demand for the currency among major players. This, given the limited supply due to the narrowing of the trade balance surplus, as well as the growth in the share of foreign trade settlements in rubles, affects a more noticeable increase in the quotes of the dollar-ruble pair. Speculators are also making their contribution, adjusting to the growing market volatility. Technically, there are risks that the dollar may rise in price to 92 rubles, including due to the activation of speculators in the market, but in this case, the growth will be local. According to our estimates, the fair value of the US currency on the Moscow Exchange is 86-88 rubles, where the quotes will probably return as the market hype decreases.
Movement occurs without any support from the authorities
The ruble has somewhat slowed down the pace of weakening, but its movement in recent weeks looks impressive. The balance of payments continues to signal a reduction in the inflow of foreign currency into the Russian Federation, which provokes increased demand and pressure on the ruble. The movement is taking place without any support from the authorities: the Central Bank notes the absence of risks to financial stability, the Ministry of Finance even previously called the rate of 80-90 rubles. per dollar comfortable for everyone. Thus, the ruble is unlikely to be able to demonstrate a recovery of positions in the coming days, however, even small verbal interventions in support will be enough to bring down the rate by 3-5% from the current values.
While devaluation factors prevail and can still push the exchange rate to new extremes
Our forecast for the ruble against the dollar by the end of this week is 88.5–91.5. So far, devaluation factors prevail and can still push the exchange rate to new extremes. First of all, this is an imbalance between the declining inflow of foreign exchange earnings to Russia and the growing domestic demand of importers, as well as investors who decided to reduce their ruble positions after the internal political events at the end of June. A local negative for the ruble in the middle of the week was the information from the Ministry of Finance that in the new monthly period, as part of the implementation of the budget rule, two times less foreign currency will be sold. However, the decline in sales means that the situation with oil and gas revenues has improved, and this, on the contrary, is favorable for the national currency in the medium term.
The ruble does not feel confident enough
In favor of the ruble may play a reversal of energy prices in the direction of growth. As well as the traditional support for tax payments in the 20th of July, however, this factor has a local character, and it is still not trend-forming. The ruble does not feel confident enough. Its further trajectory of movement today mainly depends on the trade balance, in particular, the growing appetites of importers with declining exports. Meanwhile, at the moment the situation speaks in favor of the prospects for the weakening of the ruble. Strengthening the position of the dollar, meanwhile, contributes to the demand for protective assets. It also showed growth against the backdrop of waiting for the publication of the minutes of the June meeting of the US Federal Reserve. The overall situation in the currency and energy markets is not adding optimism to the weaker-than-expected economic data for China, Australia and Japan.
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