Exchange bias: the euro rate for the first time since April exceeded 84 rubles

On Monday, July 27, the Russian currency is traded in different directions on the Moscow Exchange. In the middle of the day, the dollar rate declined by 0.1% - to 71.6 rubles, while the euro rate grew by 1% and reached 84.4 rubles for the first time since April 2.

The official exchange rate of the Central Bank on July 28 was set at 71.59 rubles per dollar and 83.78 rubles per euro.

To a large extent, the observed weakening of the Russian currency against the European one is due to the record rise in the price of the euro on the world market. Natalya Milchakova, deputy head of the Alpari information and analytical center, expressed this point of view in an interview with RT. At Monday's trading, the rate of the single European currency rose 1% against the US dollar and reached $ 1.176 per euro. The value became the highest since September 2018.

“Most likely, the statistics released today influenced the strengthening of the euro. Thus, in July the indices of economic expectations and business optimism in Germany showed growth and far exceeded analysts' expectations. As a result, the mood of European investors has improved, and the national currency of the region began to rise in price, ”explained Natalia Milchakova.

At the same time, the fears of financial market players regarding the spread of coronavirus in a number of countries exerted some pressure on the Russian currency. According to Johns Hopkins University, since the beginning of July, the number of COVID-19 cases in the world has increased by almost 6 million and is currently approaching 16.5 million. Against this background, investors are massively selling risky assets, including the ruble.

"Market participants see the continuing risks of the second wave of the epidemic and understand that in the event of the next quarantine, the economy will face negative consequences," Alexey Korenev, an analyst at FINAM Group, explained in an interview with RT.

Also, the Russian currency to a certain extent reacted to the adjustment in oil prices, says Ivan Kopeikin, head of analytical content at BCS Broker. On Monday, the cost of raw materials of the benchmark Brent grade on the ICE exchange in London decreased by 1.5% - to $ 43 per barrel.

At the same time, as experts note, at the moment there are no signs of panic on the global energy market. Thus, oil prices remain relatively stable and in the near future will continue to fluctuate in the range of $ 40-45 per barrel, says Alexey Korenev.

According to the expert, in recent days, the weakening of the ruble was held back by the tax period. At this time, exporting companies traditionally sell foreign currency and buy rubles to pay taxes.

Moreover, the Bank of Russia is still supporting the ruble, analysts say. Recall that in order to stabilize the exchange rate from March 10, the regulator began proactive sale of foreign currency in the domestic market. Thus, the Central Bank artificially increases the demand for rubles. In total, during this time, the volume of currency sales reached 1.05 trillion rubles.

In addition, stable macroeconomic factors in Russia play in favor of the ruble. Thus, according to Ivan Kopeikin, investors positively assess the low level of the country's public debt and the relatively high profitability of Russian government securities.

“First of all, the national currency is supported by the low debt burden of Russia and still attractive real interest rates in comparison with other countries. Against this background, until the end of summer, we do not expect strong changes in the dynamics of the ruble. Most likely, the exchange rates of the dollar and euro against the ruble will remain close to their current values, "Kopeikin explained in a conversation with RT.

According to Natalia Milchakova's forecast, by the end of July the euro exchange rate may again drop to 81-82 rubles. At the same time, the relative stability of the dynamics of the Russian currency can be ensured by a sharp weakening of the dollar in the world market, says Alexey Korenev.

“Today in the United States there is a number of accumulated problems associated with the same coronavirus. The US authorities are discussing the possibility of introducing new quarantine restrictions, which in turn may negatively affect the dollar and the American economy as a whole. Investors do not need these risks. In the near future, one dollar can be purchased for about 71-74 rubles, while the euro exchange rate will be traded at 82-86 rubles, "Korenev concluded.