Dollar exchange rate. Forecast for May 22–26

Denis Buivolov,
analyst

The approach of the tax period should provide additional demand for ruble liquidity

Our forecast for the ruble against the dollar next week is 77.5–80.5. The approach of the tax period should provide additional demand for ruble liquidity. At the same time, a lot will depend on the external background. In case of a successful resolution of the situation around the increase in the US national debt ceiling, global risk appetite will improve, the dollar will weaken against major currencies, and oil prices will receive support. In such circumstances, the Russian currency may show strength and push the dollar in the direction of the 77-78 zone. At the same time, increased sanctions and the threat of an escalation of the conflict in Ukraine may put pressure on ruble assets.

Vladimir Evstifeev,
head of analytical department

Support from exporters is likely to be moderate

The ruble reduces volatility ahead of the May tax period. Not in favor of the Russian currency is the strengthening of the dollar in the world due to the continued nervousness in connection with the ceiling of the US national debt and the hawkish comments of the Fed representatives. It is also worth highlighting the low prices for oil from the Russian Federation. New EU restrictions remain a background risk. Support from exporters is likely to be moderate. The low volume of the main tax payments relative to March and April, as well as the continued increased demand for foreign currency on the part of importers, will neutralize the effect of support from the tax period.

Maxim Timoshenko,
Director of Financial Market Operations Department

Geopolitics news will add volatility to the national currency.

The dollar held strong positions last working week and ended it with growth on the Moscow Stock Exchange. Analysts are focusing on the high level of inflation in the US, which, according to forecasts, will continue to keep the Fed on its toes, forcing it to raise rates. The weakened yuan continues to be under pressure from China’s relatively slow economic recovery. The market expects the Bank of China to cut rates further in an attempt to change the situation. This state of affairs does not add optimism to the energy market, where the stakes on the future growth prospects of Chinese demand for resources are still high. At the same time, India’s increase in Russian oil imports to a record high last April is to support the ruble. Geopolitics news will add volatility to the national currency.

Egor Zhilnikov,
chief analyst

The dollar will show sideways movement with attempts to reduce

At the moment, a balance has been formed between the supply and demand of currency in the market, overcoming the range of 80–82 rubles by the dollar. will be a difficult task. It is not necessary to expect the strengthening of the ruble. Among Russian companies, there is a high demand for the currency (yuan), which is why the rates on swap operations have reached a maximum since the beginning of the year. The dollar will show lateral movement with attempts to reduce. We consider the current range of the dollar exchange rate to be 79–80.5 rubles. The positions of the ruble may be supported by a slight expansion of the supply of foreign currency against the backdrop of the approaching end of tax payments by exporters. The focus of investors will be data on US GDP. The market’s assessment of the probability of raising the Fed’s key rate at the next meeting has increased, as a result of which the dollar is becoming more expensive on global markets, and, consequently, its weakening on the Moscow Exchange will be restrained.

Gradually rising oil prices support the ruble

Until the end of next week, we forecast trading in the dollar/ruble pair in the range of 78.5–80.5 rubles/$. Volatility in currency pairs decreased amid realization of risks associated with new restrictions. Market participants quickly appreciated them and continued to increase their positions in the Russian stock market. Within a week, companies will convert foreign currency earnings to pay taxes, which will support the Russian currency. Gradually rising oil prices are also supporting the ruble. Of the important events before the end of the week, we highlight the publication on Wednesday of the minutes of the previous meeting of the US Federal Open Market Committee, as well as the release on Thursday of data on US GDP for the quarter. According to the protocols, market participants will predict the further direction of monetary policy and the dollar rate. And data on US GDP will have an impact on the dollar index. With the release of strong indicators, the dollar index will decrease, local currencies will receive an impulse to strengthen.