The reason is the refusal of the US Federal Reserve to raise interest rates. Chief Analyst foreign exchange market Morgan Stanley Hans Redeker, in an interview with Bloomberg, said: “We are quite pessimistic based on economic situation in USA. If you look at our internal indicators, which reflect domestic demand very well, you will see that demand will decline.”
The US Federal Reserve, in fact, has no choice. If she raises the rate, then this could provoke uncontrolled processes affecting the economy of the United States. Analysts from the German Deutsche Bank published an article on this subject on their organization's website:
The US Federal Reserve System (FRS) will make a big mistake if it decides to raise the base interest rate in September. Even if the US manages to avoid a recession, the lack of investment is expected to hurt productivity. Consumption growth will eventually slow down... interest rate The US Fed is only 18% in September against 28% at the beginning of the second quarter
To prevent this from happening, the rate must be kept at the proper level (0.25-0.5% per annum). And this means that you have to put up with a slight fall in the dollar.
Obviously, the American currency has a tremendous impact on any processes in the global economy and also on the value of other national currencies, including Russian ruble. It should be noted that July 2016, according to observers, was the worst month for the Russian currency - the ruble fell against the dollar by 3.14% in trading on the Moscow Exchange. However, the analyst of the FINAM group of companies, Zvarich Bogdan, assures Noteru.com that in the near future the Russian currency more problems shouldn't be:
In fact, already at the current moment, the dollar quotes are based on the preservation of the rate by the American regulator until the end of the year at the current level. Thus, the probability of maintaining the rate at the December meeting is now estimated at 60%. For meetings that take place in September and November, the probability is even higher. As a result, these expectations are included in the current quotes of many assets. And the dollar is no exception.
“Therefore, wait for a strong drawdown American currency not worth it at the moment. If bad data on the American economy continues to come out, which will help reduce the likelihood of a change credit monetary policy in the near future, this may have a negative impact on the dollar. In this case, we will see an increase in oil prices, which will support the Russian ruble and allow it to strengthen against major world currencies.”
Vadim Iosub, a senior analyst at Alpari, on the contrary, admits that the ruble may lose value, but not so much due to changes in the dollar, but because of changes in the cost of oil. “The referendum on leaving the UK from the EU has sharply increased the uncertainty in the world financial markets, and at the same time reduced the likelihood of an increase in the Fed rate at the next meetings. If before the popular vote it was thought that there would be at least two rate increases before the end of the year, now the probability of a single increase before the end of the year does not exceed 50%.
At the same time, news about the upcoming Brexit, as well as an unexpected slowdown in the growth of the US economy in the second quarter to 1.2% in annual terms (it was expected that GDP growth would be 2.6%) has already been won back by the dollar, and the further trajectory of the US currency will depend on newly incoming information about the labor market and inflation. Therefore, it is still impossible to speak unambiguously either about a 5% decline in the dollar, or about the same growth, and Morgan Stanley's forecast is just one of many expert versions. If we talk about the exchange rate of the dollar against the ruble, then in more it depends on the dynamics of world oil prices. If oil prices remain below $45 per barrel of Brent, a scenario with an increase in the exchange rate to 70 rubles cannot be ruled out,” the expert shared his opinion with Noteru.com.
However, given that the price of oil at $45 does not suit the majority of hydrocarbon exporters in the world, we can rightly assume that it will rise sooner or later, which means that the ruble will not lose much of its value.
Noteru.com columnist Ilya Kruglei
About what to expect for the Russians - the forecast of the dollar exchange rate for March 2018 promises a fall in the domestic currency. Analysts cite factors that can affect the ruble exchange rate. Among them: an increase in oil production and stabilization in the global financial markets.
Latest news: what will happen to the dollar in Russia from March 1
How they transmit last news, the exchange rate of the American currency was strongly influenced by uncertain situation, related to the funding of the US federal government, since the House of Representatives has not yet made a final decision on this issue. dollar and stock market reacted by falling. Experts believe that the overseas currency will continue to remain under pressure for the next two weeks, until US ministries and departments resume work. Traders also believe that the dollar will weaken against the background of the normalization of the monetary policy of the world's central banks. If earlier the US Federal Reserve acted as the only key regulator, now the global central banks have begun to influence the balance of rates.
Statistics of the ruble exchange rate against the US dollar since the beginning of 2018 (data from the Central Bank of the Russian Federation)
The factor that influenced the growth of the dollar in Russia and the depreciation of the ruble was the data on oil production and the adjustment of its volumes in the United States. The price of oil is still the main factor that determines the value of the domestic currency. The situation will worsen if not from March 1, then at the end of the month.
Forecasts of analysts and experts
Meanwhile, the forecasts of experts from other countries are not so rosy. They believe that the Russian ruble may collapse as early as the end of March. According to the UBS and Nordea report, the ruble will begin to fall even at $70 per barrel of oil. Among the factors that keep the domestic currency afloat, they name:
- operations carried out by the Ministry of Finance of Russia for the purchase of foreign currency;
- the expected tightening of anti-Russian sanctions;
- declining investor interest in carry trade transactions.
The combination of these reasons, according to analysts' forecast, will lead to the fact that at the end of next month the ruble will lose at least 4%. A possible fall will lead to an increase in the dollar. Chief Analyst of Globex Bank Viktor Veselov: If the forecast is confirmed (the consensus forecast for inflation is 2%), then the dollar may strengthen against world currencies, as the likelihood of an increase in the interest rate of the US Federal Reserve will increase". The expert believes that free dollar liquidity, formed after the collapse of the US market, may come back and attract the interest of investors. The Russian ruble could also develop in a similar scenario, but an increase in US oil production will lead to a decrease in demand for it, the price will be under pressure, respectively, and the ruble too.
This prediction is supported by most Russian experts. It is expected that the ruble exchange rate will fall to the corridor of 57.30-58.90 per US dollar. Such an indicator is possible in case of stabilization of world markets, including the American one – panic sales of risky assets are expected to stop. At the same time, Natalia Shilova, who holds the post of director of the Center for Macroeconomic Forecasting at Binbank, is sure that the end of February will be favorable for the domestic currency, since this period of time accounts for the tax period and, possibly, an increase in Russia's rating.
MOSCOW, Jan 15 - PRIME, Anna Podlinova. The dollar at the beginning of the week continued to fall against major currencies, reaching the lowest levels over the past three years. In 2017, the dollar lost an average of 6% against other currencies, say analysts polled by Prime. The decline in the dollar is primarily due to the rise in price, which broke through the mark of $70 per barrel last week and continues to stay near this level.
However, experts clarify, the fall of the dollar does not mean that the US economy is heading for a recession: at this stage, the current price of the currency is quite comfortable for American producers. In addition, the Fed is closely monitoring the dollar and is quite capable of making a statement that will support the national currency. In addition, according to analysts' forecasts, by the end of the year the "American" will still rise from the depths and settle at the level of 60 rubles, unless, of course, there are additional factors for even greater growth.
Reasons for the fall
First of all, the strengthening of the ruble against the dollar and the euro is associated with an increase in oil prices to $70 per barrel, says Viktor Veselov, chief analyst at Globex Bank. "This caused an influx of liquidity into the Russian market due to its raw material component. Thus, foreign investors they are in a hurry to make money while oil prices are high," he explains, adding that the ruble will continue to strengthen until the end of January. At the same time, according to the analyst's forecasts, the dollar will cost 55 rubles in the first quarter.
This will happen, firstly, thanks to tax period and secondly, because of high oil prices. However, in early February, the introduction of new US sanctions against Russia is expected, which may temporarily provoke an outflow of foreign liquidity from Russian market, specifies Veselov. At the same time, foreign investors will return to Russia because of the high real rate above 5%, he says.
The Russian currency is traded synchronously with other currencies developing countries, notes Natalia Shilova, director of the Center for Macroeconomic Forecasting at Binbank. Since January 12, the Mexican peso has strengthened against the dollar by 0.8%, the Russian ruble - by 0.5%, the Chinese yuan, the Malaysian ringgit, Polish zloty- by 0.3-0.5%. "This dynamic is mainly due to the increased expectations of investors from the global economy in 2018, with regard to both the demand for commodities and the demand for more risky and profitable assets," explains Shilova.
The real effective ruble exchange rate decreased by 0.9% in 2017
She also believes that the ruble will remain strong in January-February, thanks to relatively stable oil prices and a seasonal expansion of the trade surplus.
A more noticeable weakening of the dollar against all currencies of emerging markets is also due to the fact that the steps that the Fed will take have already been taken into account by the market, says Denis Davydov, chief analyst at Nordea Bank. At the same time, the potential for tightening policy from the ECB and some signals from the Bank of Japan to tighten stimulus measures make these currencies more attractive. "Therefore, the market is still focused on getting more profit from investments in the euro and yen than from investments in the dollar," he says.
This does not mean that the US economy is heading into recession. "It's just that the capital market does not see the risks that it saw at the beginning of last year, and takes a more active position in other currencies and assets other than the dollar," Davydov says. This year, the dollar will moderately decline against the euro, but the potential for its further weakening does not look so deep, the analyst notes. A complete repetition of the situation in 2017, when the dollar lost more than 10% against the euro, is not expected, the movement in the pair could be about 5%, he clarifies.
For the ruble
Nordea Bank's baseline forecast assumes 61 rubles per dollar at the end of 2018. "Despite the fact that the attractiveness of the ruble will remain, the narrowing of the differential between the rate of the Central Bank of the Russian Federation and the Fed will make the carry story less attractive," Davydov explains. If the strengthening of the ruble happens, it will not be as bright as in the past year. Also, the activity of market participants will cool inflation growth in the second half of the year, he says.
The growth of the ruble is facilitated by the payment of a large amount of insurance payments due today, adds Alexei Devyatov, chief economist at Uralsib. The strengthening of the euro continues to play against the US currency, due to the possible resumption of discussions about a faster curtailment of measures to support the economies of the euro area countries by the ECB, as well as successful negotiations on the creation of a ruling coalition in Germany, he notes. The average dollar exchange rate this year will be 58 rubles, the expert predicts.
Shilova fully agrees with him, who also expects the dollar at 58 rubles on average for the year. In her opinion, the ruble will remain stable thanks to the growth of exports due to the high price of oil. At the same time, the introduction of additional sanctions will limit the inflow of foreign investment, she notes. "However, considering that last years it was already insignificant, in the conditions of a stable commodity market in 2018, this factor will be insignificant," says Shilova.
Expectations for Brent
The shortage of oil supply in the world market will push oil prices up in the first quarter current year, says Veselov. However, due to the fact that the exit strategy of countries from, in the future, this will create a risk of a decrease in the price of "black gold". According to Globex forecasts, the average annual oil price will be about $68 per barrel.
In Binbank, on average for the year, they expect oil prices to stabilize near the $60 mark, Shilova says, noting that after the first quarter, a correction is most likely. According to Davydov from Nordea Bank, in the base scenario, the average annual price of Brent will be $63, and by the end of 2018 it will be at the level of $65.
Uralsib Senior Analyst Aleksey Kokin expects oil prices to drop to around $65 by the end of January, driven by increased US drilling and production and a lower assessment of the risk of a return of US sanctions against Iran. The average annual price for Brent, according to Uralsib's forecast, will be $57 per barrel.
Against the ruble
The dynamics of the ruble quotes in the coming days will depend on oil prices, which may decline moderately, Devyatov said, noting that an increase in the operations of the Ministry of Finance to buy foreign currency on the market could play against the ruble. Moderate weakening of the exchange rate is expected in the medium term national currency compared to current quotes due to correction in oil prices and a gradual decline in non-residents' interest in ruble-denominated assets as a result of a further decline key rate The Central Bank and the growth of the Fed rate, the economist believes.
The purchases of foreign currency by the RF Ministry of Finance, the introduction of new sanctions against the Russian Federation, and the reduction of the key rate will play against the ruble, Veselov agrees. “These factors will help the dollar strengthen against the ruble,” he says, predicting the ruble at around 59-60 per dollar by the end of 2018.
In general, Davydova notes, on this moment the dollar exchange rate is quite comfortable for the American economy. "Given the US debt, it's a pretty good story. It also improves the competitiveness of US manufacturers," he says. In the future, it is unlikely that the American regulator will allow the dollar to weaken uncontrollably, Davydov concludes.
Stock Markets Group - Bitcoin fell below 8,000 on March 17, breaking through important support, despite yesterday's slight optimism. Investors did not have enough reasons before the weekend to stay in the market at the weekend. As a result, Bitcoin confirmed our forecast and turned red in the first half of the day.
The black bar for cryptocurrency rates continues. New scandals with the theft of digital assets, dishonest ICOs and new government bans different countries, all this was present last week, and did not allow the price of bitcoin to recover from the past collapse.
At 00:20 Moscow time, the main trading platforms show the following BTC/USD rate values:
Bitstamp - $7,810 (-5.50%)
Bitfinex - $7,790 (-8.8% %)
Coinbase – $7,836 (-4.8%)
The capitalization of the bitcoin market currently stands at $135,231 billion.
Bitcoin exchange rate needs "fresh" money and loyalty
Visa CFO Vasant Prahbu, in an interview with the Financial Times, once again doubted the expediency of the existence of bitcoin and cryptocurrencies. According to him, this is the tool that fraudsters and corrupt officials use today.He noted that he was shocked by the fact that those who call for buying or selling bitcoin do not understand anything about this. The uncertainty of the origin of this cryptocurrency is the main problem in legalization, while traditional money is controlled by regulators who are responsible for issuing it.
“Illegally obtained money is difficult to use in banking system. In this case, the cryptocurrency is a phenomenal tool, and I am sure that every corrupt official or fraudster will use it.”
“It scares me when people who don’t understand anything ask about bitcoin, for example, a limousine driver going to the airport or a bank teller”
“If a shoe shiner tells you which stocks to buy, it tells you that we are dealing with an ordinary bubble,” he recalled the classic stock exchange axiom.
Vasant Prahbu, is one of the vocal critics of bitcoin, and has repeatedly expressed support for financial officials who propose to ban cryptocurrencies.
The current situation with the most popular cryptocurrency is really more and more connected with criminalization. Investor losses very often exceed hundreds of millions of dollars, and of course this negatively affects the future of the bitcoin exchange rate.
In addition, the past week has confirmed fears that big business tries to stay away from cryptocurrencies due to their vulnerability to criminal schemes.
Google has put an end to this issue, and apparently this is not last decision, relative to bitcoin among the world's advertising leaders.
Bitcoin exchange rate today
The cryptocurrency broke through the important psychological level of $8,000 and rushed lower. Buyers took profit ahead of the G-20 meeting, which starts on Monday.
On it, the topic of bitcoin and digital assets, as experts expect, officials will pay special attention. It is not yet known what decisions will be made and whether they will support the market. Therefore, most players preferred to stay out of the market over the weekend, thereby weakening the position of Bitcoin.
Positive scenario
We expect the next growth of the cryptocurrency only after the price drops to the $6,000 mark. Before that, the bitcoin rate will remain under strong pressure even without the appearance of new reasons. The future of the cryptocurrency market is increasingly vague, and this is perhaps the main reason for investors to be cautious today.
Negative scenario
The bitcoin rate will continue to fall lower and the first target for the price is $6,000. Then the cryptocurrency will try to gain a foothold on given level, however, re-testing it may lead to a decrease even lower. As we wrote earlier, it will be around $5,500.
Next week, according to our forecasts, the balance of players' power will be shifted towards sales, so it is better to stay out of the market in the coming days.
The rates of most cryptocurrencies have also surrendered to the onslaught of sellers and are falling. Ripple lost 8.95% in 24 hours, while Ethereum dropped 8.27%. In the coming hours, the stabilization of the value of digital assets is unlikely.