Forecast On Currencies: Will The Dollar Break New Records In September?
- 4.09.2023, 18:25
Analysts’ opinion.
The last month of summer has come to an end, but there is no cooling observed in the foreign exchange market of Belarus and Russia. In its traditional forecast, Myfin figured out what to expect from the rates of major currencies.
Volatility persists
Last week, on Monday and Tuesday, the US dollar traded below 3.20 rubles. However, by the end of the trading week, the dollar rate went up again and stopped at USD/BYN 3.2270 over the weekend. In total, for the week, the “bucks” added +1.74%, since the beginning of the year, the growth of the dollar has already been +17.93%.
The Russian ruble on the Belarusian foreign exchange market over the same period also minimally grew by +0.18% and closed last week at a price of RUB/BYN 3.3560 per 100 Russian rubles. Since the beginning of the year, the drawdown of the Russian ruble against the Belarusian one is — 11.30%.
Euro on the last day of August was traded on the Belarusian currency market at EUR/BYN 3.5000. The official rate of the National Bank for the weekend was set at EUR/BYN 3.5113, which means that the growth potential of the united currency remains on the commercial market.
But it is also possible that the euro exchange rate may turn downwards, since last Friday, on September 1, after the close of trading on the BCSE, an important statistic for the financial market was published — the NFP labor market report in the US.
Good statistics support the dollar
The main data of the report came out in the green light for the US dollar, and the EUR/USD currency pair closed last week's trading with a significant drawdown. The closing rate was EUR/USD 1.0776, the US dollar index DXY returned to growth and stopped at 104.250 p.p.
The problem is that the global financial market is now waiting for the decisions of the leading regulators represented by the US Federal Reserve and the European Central Bank on the interest rate in the second half of September, and there is no consensus yet. The economic situation in the world is quite contradictory — from economic growth in the United States to a slowdown in China and stagnation in the European Union with persistently high inflation, which forces investors to resort to a wait-and-see policy and exit risky assets.
This is happening against the background of rising yields on government bonds around the world and in the United States in the first place. Benchmark 10-year Treasury yields firmly settled above 4.00% and returned to growth by the end of last week. This puts pressure on the EUR/USD pair, and it is possible that the euro will fall this week on the Belarusian currency market as well.
There are no prerequisites for the fall of the dollar
The US dollar remains a priority both on the Belarusian and Russian markets. So far, all the factors that have put pressure on the Russian currency for the past two months are in effect. A certain reversal is visible by the beginning of the next month, because approximately since mid-July, oil prices have stabilized above 70.00-75.00 USD/br for the Russian Urals. This may lead to an increase in the supply of foreign currency on the Russian market. As the head of the Central Bank of Russia, Ms. Nabiullina, said at a briefing last week, exporters sell oil and oil products for Russian rubles, and the currency will be supported by the growth of the attractiveness of the ruble amid high deposit rates and lower credit. Therefore, at the next meeting of the Board of Directors of the Central Bank of the Russian Federation in September, a minimum increase in the key rate is permissible.
Given the above, this week we can expect further growth of the US dollar to USD/BYN 3.2500. The exchange rate of the Russian ruble may remain near the current values, while the euro exchange rate will decrease minimally.