On Monday, December 16, the dollar and the euro unconditionally capitulated to the powerfully attacking ruble and updated the annual lows. By the close of trading on the first working day of the week, the exchange rate of the dollar by calculations “tomorrow” fell by 74 kop. (-0.74%), up to 62.43 rubles, the euro lost 34pc. (-0.48%), falling to 69.58 rubles, the dollar thus returned to the values of July 2018, and the euro – to the levels of February 2018.

Optimism for the Russian ruble and other currencies of developing countries provided, as always, difficult predictable U.S. President Donald Trump. The US president made another sensational statement on Twitter, saying that the first phase of the trade deal with China “will be finalized in the next two weeks.” Recall that the U.S. Department of Commerce last week reported the possible signing of the first stage of the deal in January, and Trump is probably trying to boost events and present the U.S. stock market with a New Year gift in the form of a rally. On the world markets, Trump’s unexpected and spectacular statement brought additional optimism, though not the fact that everything will happen as the Us president would like.

Since Monday, the key rate of the Central Bank of Russia has decreased by 0.25 p.p., to 6.25%, according to the decision taken on December 13 by the regulator’s board of directors to reduce the key rate, the fourth in 2019. The ruble, as we can see, reacted to the decision of the Bank of Russia, as it often happens, paradoxically – by strengthening instead of a possible decline, but on the global positive, when everyone was interested in what would happen to the U.S.-China trade deal, the ruble should was strengthened even though the key rate cut.

The price of crude oil on Monday against the background of the world positive rose again, this time by 0.6%, to $64.65 per barrel, just before reaching the level of $65 per barrel, but this may be a reality, in our opinion, much earlier than the U.S. and China will sign the first phase trade deal. This morning oil took a breather in growth, falling in price by 0.06%.

We expect that the ruble will continue to strengthen today at the opening of trading. We reduce the forecast for the dollar to 62-63.2 rubles, and at the euro rate lower our expectations to 69-70 rubles.

Natalia Milchakova, deputy head of alpari Information and Analysis Centre