Especially for “the Russian newspaper” Dmitry Babin, an expert on the stock market, “BCS”, named ruble in the coming months and analyzed the situation in the oil market:
– the Oil price didn’t close until the end gap on your chart, – pays attention the expert, – although it may have grown rapidly, helped by including the extension of the maximum reduction in OPEC production+ until the end of July.
the Russian currency has lagged behind the growth of the oil, reducing its overvaluation to the oil factor. As a result, ruble cost of a barrel of Brent is also back to the levels of early March, reaching 3000 rubles per barrel. Nevertheless, it is still far from the more acceptable range 3700-4400, which was in the second half of 2019.
Therefore, in the event of a further increase in oil prices, the ruble will continue to strengthen at a slower pace. At the same time, the deterioration of the situation in the oil market, the Russian currency is able to experience a serious decline.
Among 36 major world currencies to adjust their exchange rate to the US dollar since the beginning of the year as of this week the ruble has kept 28 place by the end of may he climbed from the very bottom of the list. That is, most other currencies have demonstrated in the past month comparable growth relative to the U.S. dollar.
One of the main factors of demand for non-dollar assets made by the new measures of monetary and fiscal stimulus by major economies. They aim to prevent the worst economic consequences of a global pandemic. In addition, the removal of the antivirus restrictions happening around the world, emphasizes the hope for a quick recovery of the world economy.
However, already in the middle of the month showed signs of accelerating growth of new cases of coronavirus in some of the larger countries, primarily in the United States. This threatens the second wave of the pandemic, which will lead to a deeper and longer economic crisis.
This factor in the medium term will play a major role in the dynamics of all markets. The deterioration of the situation with coronavirus will hit the oil market, as it will put an end to the rapid recovery in global demand for oil. In this case, even an extension until the end of the year the maximum amount of production cuts within OPEC, and the extension of these measures will not prevent the drop in oil prices.
But as global investors perceive such a scenario as too pessimistic, and its implementation is unlikely.
According to many market participants and experts, even if there is a second wave of the pandemic, it will not be as strong as the first. And restrictive measures will be imposed, will not be as stringent as in the previous few months. In addition, time plays in favor of the makers of the vaccine, which are working hard in many countries.
After the decision of the Bank of Russia the ruble has continued to appreciate in response to acceleration of the growth of world markets and oil prices. Nevertheless, in the short-term horizon, the potential strengthening of the Russian currency for the most part exhausted. Therefore, it is more likely that the dollar in the coming months will go above 70 roubles, than to remain in the corridor, 68-69 rubles.
there is Now increased uncertainty as with the dynamics of a global pandemic, and the geopolitical situation. In recent weeks there has been an escalation of several long-standing conflicts (inter-Korean, Chinese-Indian, mazarski).
against the backdrop of increased economic and geopolitical threats to global investors will be more cautious, given that many risky assets are close to pre-crisis levels. Ruble in this regard is no exception, and therefore will over-react to a possible deterioration in the external situation.
