The ruble is losing ground against the dollar and Euro on weak oil

The ruble is losing ground against the dollar and Euro on weak oil


According to the Moscow exchange, the Euro rate calculations “tomorrow” increased by 0.46 ruble to 70,05 of the ruble, the dollar – 0.61 ruble to ruble 61,89. Support the rouble have expectations of the upcoming year-end of expenditure of the Ministry of Finance.

MOSCOW, 19 Oct. Dmitry Mayorov. The ruble in the first half of the trading session on Monday mainly decreased on the background of balancing the cost of oil is slightly below the key level of 50 dollars per barrel of Brent.

The slowdown of the Chinese economy weighs on the markets of risk assets, experts say.

The dollar calculations “tomorrow” to 13.32 MSK increased by 0.61 rubles to 61,89 of the rouble, the Euro rate by 0.46 ruble to 70,05 ruble, follows from the data of the Moscow exchange.

Ruble under pressure from weak oil

Courses of the ruble against the dollar and the Euro in the first half of the day slightly reduced under pressure from the uncertain dynamics of the oil market, while unable to confidently gain a foothold on the psychologically important mark of $ 50 per barrel of Brent.

The growth of China’s GDP in the third quarter in annual terms it stood at 6.9% vs. 6.8%. Although the rate was slightly better than expectations, the growth of the economy still shows the slowest pace since 2009. And the country’s industrial production in September rose yoy by 5.7% against the forecast of 6%. In August the growth was of 6.1%.

While support for the oil market have data of the American oil and gas service company Baker Hughes. The total number of drilling rigs in the US by end of working week decreased by 8 units, or 1%, and amounted to 787 units. In annual terms the index declined by 1131 units, or 58.9 per cent.

Some support for the ruble on Monday and have expectations of the upcoming year-end of expenditure of the Ministry of Finance. So, the head of the Ministry Anton Siluanov said that his Department in 2015 will spend 2,62 billion rubles from the Reserve Fund. So far in 2015 from the reserves, the Finance Ministry has spent about 1.3 trillion rubles, that is, there are still about 1.3 trillion.

For this we have to convert the reserves in the amount of about $ 20 billion. Most likely, they will not come out on the market, and the Central Bank converts them himself, giving the Ministry of Finance needed the RUB, analysts say. However, the digestion of the Central Bank about $ 20 billion before the end of the year will keep its activity in the possible purchase of foreign currency in reserve in case of possible depreciation of the dollar below 60 rubles, analysts argue.

In addition, estimated Eugene Koshelev of ROSBANK, Bank more relevant in the current environment mitigating effect will be the reduction of the key rate is already at the next meeting on 30 October — by 0.5 percentage points to 10.5% per annum.

In the end, dollar and Euro after stabilizing last week are growing day by about 50 cents.

Forecasts and recommendations

The ruble may get support on the background of which started in Russia the tax period, assessed from Irina Rogov, Forex Club. “The peak of the payments have to start next week, so for current exporters to sell foreign currency, in preparation for the payments,” she said.

However, in the short term, the return of quotations pair GBP/USD to the area of 62 rubles per dollar, said Rogova.

At the current level of oil prices, the current exchange rate of the ruble looks equitable from the point of view of the balance of payments, which leaves relatively little potential for further strengthening of the ruble, of course, if oil prices do not rise to a qualitatively new level, says Maxim Korovin of “VTB Capital”.

Early next week comes a deadline to pay the mineral extraction tax, which to some extent might be a factor supporting the ruble, but at the same time, exporters in the previous week, were actively selling foreign currency, he added.