Last week on the stock exchange the Russian rouble weakened against the U.S. dollar at 1.32 ruble and against the Euro only by 2 kopecks against the background of a sharp decline in EUR/USD currency pair.
Recall that the focus of investors last week was the US presidential election, the results of which came as a surprise to the investment community. So, the 45th US President will be Donald trump, who won more electoral votes than Hillary Clinton. In addition, the Republicans gained a majority in the U.S. Senate and the U.S. House of representatives which has not happened since 1928. In the end, most emerging markets were under significant pressure due to a sharp decline of risk appetite and, accordingly, the outflow of capital, including from Russia, which provoked the rise of the us dollar.
Additional pressure on the Russian ruble also had a further decline in prices for “black gold” and the Light crude oil closed lower for the third straight week. So, on Wednesday published data on oil reserves in the U.S., which rose last week to 2,432 million barrels compared to the increase by 14.42 million barrels a week earlier. Analysts had forecast growth rate by 1.33 million barrels.
Macroeconomic data last week was published Russia’s international reserves, which fell to $395,7 billion, compared with $391 billion a week earlier. Also released GDP data for the Russian Federation, which in the third quarter fell by 0.4%.
In the international arena, the currency pair EUR/USD was under the control of euromedica after the elections of the President of the United States. In General despite concerns, investors reacted positively to the victory speech of Donald trump regarding his future economic actions. However, after the victory of Donald trump, the probability of a rate hike at the December meeting rose to 86%. Additionally, it is now expected that the fed will maintain tighter monetary policy.
In the first half of this week the ruble is declining relative to its competitors due to a further fall in oil prices and amid the global trend of strengthening of the us dollar.
This week market participants should pay attention to weekly data on oil reserves in the United States. In addition, on Thursday in the USA will be published data on consumer inflation for October. According to our expectations, consumer price index seasonally adjusted increased by 0.4%, while the consumer price index excluding food and energy increased by 0.2%. If the data match or are better than expectations, the probability of a rate hike in December will have more than 90%.
On the daily chart the pair is trading within the ascending channel, where the price is near its upper limit. Stochastic lines are in overbought zone, so it is expected the temporary suspension of the upward movement. Support is on a mark of 64.5.
Source: Thomson Reuters
On the daily chart the pair is moving within the rising channel, while around 71. Stochastic lines are in the neutral position, so consolidation of the pair may continue.
Source: Thomson Reuters