The ruble rose, taking into account the dynamics of exchange rates and the advantage of sellers of local currencies

MOSCOW, March 13 (Reuters) – The ruble posted strong gains on Monday, amid outside support from stronger investors and a falling dollar on expectations the Fed may hold off on interest rate hikes.

Locally, the morning closing of safe positions accumulated over the weekend may play a positive role, as well as the gradual activation of exporters in the sale of FX profits at the end of the seasonal break after paying the February taxes.

The balance in favor of the sellers of the currency may also be supported by the actions of the Central Bank as part of the budget rule – the regulator is currently selling the Chinese yuan worth 5.4 billion rubles a day.

By 6pm Moscow time, the dollar/ruble was close to 75.05 tomorrow, with the ruble gaining almost 1.4% after hitting a session high of 74.92 earlier.

At that time, the euro / ruble pair was close to the level of 80.46, here the ruble gains two-thirds of a percent.

Combined with the yuan, the ruble strengthens by 0.3% and is traded at 10.94.

However, the ruble remains close to its lows since April last year (and in pairs with the euro and yuan were updated today) with declining domestic currency inflows due to relatively low prices of Russian oil, Western restrictions on exports of oil and petroleum products from the Russian Federation, while demand is recovering exchange rate on the part of importers due to the reorientation of goods purchase channels to the East.

Analysts of the investment bank Sinara called the main reason for the weakening of the ruble since the beginning of the year an intensive outflow of capital against the backdrop of insufficient supply of foreign currency.

At the same time, they expect the ruble to strengthen after a weak first quarter, although at the same time they have lowered the forecast for its average annual exchange rate to 70 to the dollar from the previous 67.

Raiffeisenbank analysts believe that maintaining a surplus on the current account of the Russian Federation will remain the main reason that will protect the ruble from a strong weakening, and taking into account a number of other factors, they allowed the final strengthening of the Russian currency to 73 per dollar by the end of the year.

In the Forex market, most commodities and emerging currencies are moving higher against the US currency, and in the evening many of them are again showing significant gains after a break during the day.

Oil traded in the red in the evening, a barrel of Brent is cheaper by 1.3% and is valued at USD 81.73.

US authorities took extraordinary action on Sunday to bolster confidence in the banking system after the collapse of large Silicon Valley Bank and the closure of New York’s Signature Bank, with markets waiting for the Fed to temporarily abandon its plan to further tighten monetary policy. announced last week the head of the department, Jerome Powell.

Goldman Sachs analysts said today that they are no longer waiting for a Fed rate hike after the March 21-22 meeting, while warning of high uncertainty about how the situation will develop.

Friday’s ambiguous labor statistics in the US also played a role in changing market expectations regarding the next steps of the Fed, which reflected i.a. slowdown in the growth of the pro-inflationary component, i.e. the average hourly wage.

In addition to developments around SVB, the focus of global markets this week, in addition to developments around SVB, will be tomorrow’s release of US inflation statistics for February, US retail trade data, sales and producer price dynamics for February will be released on Wednesday, and ECB meeting on Thursday.

Friday’s meeting of the CBR board on monetary policy will be important for local markets, with expectations that the Russian regulator will keep the current interest rate, 7.50% p.a., prevail.

(Moscow office)