The Russian currency had the first gains after three days of losses versus the greenback as the crude oil rates climbed on speculations that demand will rise, suggesting that the one of the main global oil producers will export more of its commodities.
Russia is one of the main suppliers of energy for the European Union and since the first signs of economic recovery started to appear in the beginning of the year, the oil, one of Russia’s main natural resource has doubled its price, providing support for the Russian currency to remain rather strong despite the credit crunch and banking sector issues in the country. After a rather negative week, the ruble managed to climb versus the U.S. dollar as companies taxes were published today in Russia, with a significant amount of money flowing into government accounts, rising confidence towards the ruble outlook.
As the winter approaches in the Northern Hemisphere it is likely that the crude oil rates will climb even further, which would maintain the Russian currency in the band of fluctuation suggested by the government to protect exporters without measures to be taken by the Bank of Russia. The ruble is likely to remain neutral for the short-term without massive volatility to be expected.
Russian Ruble Advances on Oil, Equities
Dollar Pare Losses on Renewed Attractiveness
The dollar gained versus the euro and the pound in the very end of this week’s session as a bearish movement in stock markets increased attractiveness for the relative safety of the U.S. currency.
Continuing in the role of main global reserve currency, the dollar climbed versus its most traded rivals before market closed today, gaining versus the euro and the pound as uncertainties remain strong concerning the global economy recovery, rising attractiveness for the relative safety provided to investors by the greenback.
EUR/USD closed at 1.4303 after being traded at 1.4383 a few hours earlier.
Canadian Dollar Pare Gains on Risk Aversion
In the end of this week’s session the Canadian dollar pared its previous gains as risk aversion rose this Friday, affecting U.S. stocks performance and also the crude oil, the main Canadian commodity exported to the United States, influencing the loonie’s outlook.
The Canadian currency rose 12 percent versus its U.S. counterpart this year, and since June, Bank of Canada officials are stressing on the fact that a very strong loonie may bring a negative impact to national exporters, and measures to be taken are not ruled out, if the loonie climb further. This month the Canadian currency has been one of the biggest losers versus its U.S. counterpart among the 16 most traded currencies in foreign-exchange markets, losing 1.3 percent as this week ended, which is certainly a favorable scenario for Canadian exporters.
The rally perceived in the beginning of the month which set the loonie to around 1.07 per U.S. dollar raised eyebrows in the Bank of Canada, considering that a stronger currency decreases competitiveness for one nation’s products, with statements regarding this fact already helping to prevent the rally to continue temporarily. It is unlikely that the loonie will rise further, as the national bank already announced that it will take measures to stop its climb, so a rather neutral or bearish trend can be expected for the Canadian currency in the short term.
Poland’s Economic Outlook Provide Support for Zloty
The Polish currency extended last week’s gain this week as the Eastern European nation is showing one of the quickest recoveries in the region, increasing attractiveness for the zloty regionally.
After growing beyond economists expectations for the last quarter, Poland is being considering one of the most solid economies in the region, fact which is favorable for the zloty to gain versus several currencies, but mainly against the euro as the Polish currency suffered a severe devaluation during the worse moments of the global slump. The Polish currency climbed for a second week in a row on the country’s economic outlook.
EUR/PLN closed at 4.0923 from a previous rate of 4.1162 yesterday.
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