On Friday, the emerging markets do not see a single dynamic of local currencies. Investors remain hopeful of a peaceful resolution of the U.S.-China trade conflict, but it remains unclear whether new U.S. trade duties scheduled for December 15 will be delayed.
In general, over the past week, most EM currencies have shown a strengthening against the dollar (only the Turkish lira can be mentioned among the exceptions), and the results of the ruble (0.9%) were among the best (along with The Brazilian real and the Mexican peso).
By the end of the first half of the day on Friday, the ruble showed dynamics close to neutral, and paired with the dollar, and paired with the euro. However, in the morning hours the ruble managed to test the mark of 63.67 on the dollar, immediately re-opening the maximum of the previous day. This domestic currency, apparently, was helped by oil quotes, which in the morning hours were close to the mark of 63.5 dollars. per barrel mark. However, in anticipation of today’s results of the meeting of OPEC ministers, the quotes were slightly adjusted, having stopped supporting the ruble. It is also possible that the ruble received some support in the morning hours on the news about the increase in Fitch’s forecast for the growth of Russian GDP in 2019-2021.
By the end of the day, the main events for the markets will be the publication of data on the labor market and consumer confidence in the United States. However, even in the case of the release of unfavorable data for the U.S. economy, it is unlikely that any increase in the probability of easing the Fed’s interest rate policy at the next meetings, so the dollar can experience only short-term Pressure. At the same time, investors will continue to keep in mind the situation with the trade conflict between the United States and China: positive news in this direction could open the way for the ruble at 63.5 dollars, but in case of escalation of trade conflict, the domestic currency will be forced to quickly retreat to the range of 64.0-64.5 rubles.
Yuri Kravchenko, Head of Bank And Money Market Analysis at Velez Capital