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Tuesday: currency market news

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Tuesday: currency market news

Tuesday: currency market news
July 05
09:00 2016

The dollar and the euro have grown against the ruble

At the Moscow stock exchange the US dollar and the euro have grown against the ruble at the opening of the trading session on Tuesday.  The ruble is falling against the currency basket due to the fall in oil prices that has been visible in recent years.

The first deals on the dollar were within 64,20-64,50 rubles. For the first minutes of the trading the exchange rate was equal to 64.2575 rubles. The euro amounted to 71.55 rubles; the currency basket was 67.54 rubles.

The “Interfax-CEA” experts believe that the fall of the exchange rate of the ruble at the beginning of the session on Tuesday happened due to the decrease in oil prices in the morning of 5 July. At the same time quotations of the Brent crude oil fell below $ 50 per barrel regarding the information about the production growth in Nigeria last month. The price of futures for Brent crude oil for September has fallen by 1.22% to $ 49.49 per barrel at the London Stock Exchange to the beginning of the day. By that time the cost of the August futures contract for WTI crude oil has fallen by 1.8%, to $ 48.11 per barrel on electronic trading at the New York Mercantile.

The raw material extraction in Nigeria increased by 90 thousand barrels per day in June and was equal to 1.53 million barrels, according to Bloomberg. Nigeria was able to grow the production through the rehabilitation of infrastructure, which had suffered from the attacks of militants. Also, last Friday the oilfield services company Baker Hughes said that the number of active oil wells in the US had grown by 11 – to 341last week.

The ruble poorly reacts to the falling oil

We observed a negative dynamics of the ruble at the trades on Tuesday. This is a reflection of the dynamics of oil prices, which is falling in price because of the concern for the global economic growth and demand for oil. The cash inflows on the sale of the foreign currency to the season of the ruble dividend payments may exercise the exchange rate fall. The fall of oil has been mainly due to the situation in the Chinese economy, where the industrial sector is showing signs of deceleration. A successful services sector cannot compensate general negative trends.

Soon the demand and supply of the currency balance for the forthcoming payments of ruble dividends with their subsequent conversion by non-residents will be the main internal factor of the impact. As always, at the beginning of the calendar month the support for the ruble is reduced by exporters after paying taxes.

“The time has come when Russian companies are paying dividends. According to our estimates, the payments of Norilsk Nickel and Severstal today and on Friday respectively, will amount to 60 billion rubles, for which the company may sell up to $ 0.5 billion. In addition, 11 July is a deadline for Rosneft to pay out dividends. It is 124 billion rubles, for which the company can sell about $ 1 billion, “- said in a research report of Sberbank CIB.

Nevertheless, the bank’s analysts note that the company sells the currency not directly on the last day of the payment, but during a specific period. Foreign investors are supposed to transfer the lion’s share of ruble dividends into the currency again.

There is a moderate decrease of the commodity and emerging currencies at the financial markets.

The pound sterling has updated the minimum

The pound sterling has updated the lowest indicator over 31 years, being decreased to $ 1.3114 during the trading on Tuesday.

The national currency of the UK has fallen against the euro. It has been the lowest level since October 2013 – 1.1484 Euros, according to the information from FactSet. Investors are leaving all assets that may be characterized as risky amid a new wave of the concern about the consequences of the United Kingdom withdrawal from the European Union.

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