As elections in the U.S. affect the exchange rate?
The US presidential election on Tuesday will be the main event of the week for global markets. However, before the announcement of the first results of the vote on Wednesday, November 9, a serious movement in the markets is unlikely, say analysts “VTB Capital” in the review.
The intrigue in the elections, it seems, will persist to the last: investors are not confident in the outcome of the vote, analysts of Sberbank CIB. According to recent surveys, the separation of the two candidates from each other can not be called serious. So, the poll IBD/TIPP, published November 5, showed that Hillary Clinton’s support of 44.2% of the respondents, Donald trump — 43,7%. The results of a joint survey of the newspaper the Wall Street Journal and NBC showed Sunday that Clinton is ready to vote 44% for trump — 40%.
Markets can “Wake up” when the publication of the first exit polls on Wednesday. In any outcome of the elections, the volatility in the markets to grow, adds the Manager of research and Analytics PSB Alexander Polyutov. According to him, victory for Clinton as initially expected by the investors will yield positive emerging markets with risky assets, which include Russian. At the same time, the victory trump can lead to a weakening of emerging market currencies, he said.
What will happen to the ruble, if he wins, Hillary Clinton?
In this case, the ruble did not threaten must, says principal analyst at Nordea Bank Olga Lapshina. “It will remain stable, perhaps even a small strengthening of the dollar,” she says.
According to Polutov, victory, Clinton will give a boost to growth in oil prices (as of a risky asset). “The idea of the rise in oil prices in case of a victory, Clinton will provide short-term positive for the ruble. In this scenario, the ruble exchange rate will anchor the corridor 63-64 rubles per dollar, he predicts.
Chief economist at Eurasian development Bank Yaroslav Lisovolik does not believe in the strengthening of the ruble with the victory of Clinton. “In this case we can speak simply about a neutral effect on the Russian currency,” he said.
What will happen to the ruble in the victory of Donald trump?
This result will be an unpleasant surprise for emerging markets and risky assets. With the victory trump the ruble can drop to 64-66 rubles per dollar, says Polutov. “Negative affect as the Russian Eurobonds and Federal loan bonds. They are short term cheaper, but massive sales still is not worth waiting,” — said Polutov.
Triumph trump ruble can really sink the dollar, agrees Lapshin. The fall will be one ruble, she admits. According to chief economist of Alfa Bank Natalia Orlova, the decline of the ruble against the dollar in the victory of the Republican candidate may be deeper — 2-3 RUB.
The leadership trump will not let the ruble go into new lines of fall, I’m sure Lissovolik. “The only possible drawdown rate of the Russian currency is not more than 5% within a few days. Then there should be a correction up,” — he admits.
Monday afternoon, 7 November, the dollar rose above the 64 rubles per dollar, follows from the data of the Moscow exchange. Brent crude on the ICE futures exchange grew above $46 per barrel.
How many U.S. elections will affect the markets?
The effect of the results of voting in the United States will be short-term, analysts agree. According to Polutov, “fever” in emerging markets will last about two weeks and will be similar to the reaction to Brexit.
The biggest differences are in case of a victory trump: possible sharp weakening of the dollar against key currencies, and currencies of emerging markets, said chief analyst of the Bank Natalia Vasilyuk. “The financial markets will be a sale of assets with a relatively high level of risk, the possible rise in gold prices,” she says. It is unlikely that the period of oscillation will be long — perhaps he will continue two or three weeks, agrees, Wasiluk.
What will happen to the ruble in a month after the election?
Whoever won the election, the fed will sooner or later to tighten its monetary policy, says Orlov. “So whatever the result the main trend for emerging market currencies is weakening,” she said. On 2 November, a week before the election, the fed did not increase the base interest rate. In December the fed will raise the interest rate, which will increase the value of the dollar against the currencies of developing countries, experts say. At the end of the year will rise and the demand for foreign currency from-for growth of payments on external debts, adds Polutov. “Growing concerns about a positive outcome of the OPEC meeting on November 30. If oil producing countries do not agree on it to freeze or restrictions on the extraction of raw materials and oil will remain below $50 per barrel by the end of the year, the ruble may drop to 67 to 69 rubles per dollar,” he predicts.