The past week in the currency market was very volatile. After the growth of the dollar on Monday by almost 0.5 rubles to 58.4 rubles/$, already on Wednesday it fell below last week's closing values. On Thursday, the exchange rate reached 57.21 rubles/$, having lost more than 70 kopecks since the beginning of the week. On Friday, the US currency fell to its lowest level since the beginning of July, to 57.21 rubles/$, but ended the day at 58.45 rubles/$. The movement of the ruble exchange rate is determined by the expectation of new sanctions from the West against the background of the admission of new territories into Russia.
|Banks||Dollar exchange rate forecast (rub/$)|
|Russian Standard Bank||50.00-60.00|
|BCS World of Investments||54.00-59.00|
|Consensus forecast *||56.60|
* The consensus forecast was calculated as the arithmetic mean of analysts' forecasts
Fluctuations in the domestic market are largely dictated by non-market factors
The ruble is strengthening despite the global trend of weakening high-yielding currencies against the dollar. The main driver for the domestic market is the acceleration of the process of abandoning dollars and euros amid growing fears of additional restrictions that could make trading in reserve currencies inaccessible on local exchanges. Due to the fact that fluctuations in the domestic market are largely dictated by non-market factors, it is difficult to talk about specific levels of the exchange rate. In the context of measures of restrictions on the movement of capital, the financial authorities have more opportunities to establish a comfortable level of exchange rates. And the stronger the ruble looks now, the faster mechanisms can be introduced to weaken it.
Geopolitical signals will remain in the focus of the foreign exchange market for the short term
Our forecast for the ruble/dollar exchange rate for next week is 54-59 rubles/$. The volatility in the pair increased strongly at the end of the outgoing week, at the moment the dollar reached 53.3 rubles, and the total amplitude in the pair exceeded 5 rubles on Friday. And although by the end of the last September session, the American currency returned some of its positions, in the short term we can see new impulses for the strengthening of the ruble. The uncertainty associated with the increased risk of sanctions against the NCC and the exchange infrastructure in general is forcing investors and banks to get rid of the toxic currency on their accounts. In our opinion, the foreign exchange market will focus on geopolitical signals for the short term, as well as the dynamics of commodity prices.
Surge of volatility is possible at the end of the week
Against the backdrop of continued growth in trading activity, the dollar exchange rate maintained its downward trend. The pressure on the dollar's positions continues to be exerted by the fears of trading participants about the imminent imposition of sanctions against the NCC, as well as the disconnection of a number of banks from the SWIFT system. It should be noted that due to current events, according to experts, imports to the country have significantly decreased, which, in turn, narrows the demand for foreign currency. At the moment, there are no clear signals for changes in the trend of dollar-ruble quotes. We do not rule out that a surge in volatility is possible at the end of the week against the backdrop of US employment statistics. At the moment, we continue to focus on the range of 56–60 rubles. next week.
Of the important events for the week, we highlight the publication of data on the index of business activity in the US manufacturing sector
Until the end of next week, we forecast trading in the range of 57–60 rubles/$. We expect the pair to remain volatile amid the likely emergence of new information on restrictions. We assume that the pressure on the rate will decrease due to the release of information on Friday. Of the important events for the week, we single out the publication of data on the index of business activity in the US manufacturing sector. The release of data below analysts' expectations may stimulate the persistence of negative sentiment in the financial markets and the strengthening of the US dollar, which moved away from its maximum values. We also expect the release of the minutes of the previous ECB meeting on Thursday. Market participants will evaluate the further direction of the monetary policy of the European regulator. Perhaps another weakening of the euro against the dollar.