Russian Ruble Climbs on Oil Uptrend, Stocks Rally

The Russian ruble posted gains against the U.S. dollar for the third day in a row, as the demand for oil increases, causing the Russian stock market to have the highest rally since the beginning of the global slump.

Since the oil has rebounded reaching $67.50 a barrel this week, a sharp rally has followed in the Russian equities market, consequently pushing the ruble up, which had suffered severe losses as the global slump started last year. Russia’s economy is highly orientated to exporting its multiple natural resources mainly to Europe and Asia, and when the global slump struck the commodities market, Russia saw the Moscow Stock Exchange to drop even 20 percent in one session during the worst days of the crisis. Today UBS AG said that Russia’s economy scenario is improving, adding to the growing optimism in the domestic market and among exporters, helping the ruble to continue its rally.

As analysts predict that the Russian economy will revive its expansion path in the third quarter of this year or earlier, optimism is slowly gaining space among investors, and with the UBS AG report being positive towards Russia, it is very like that the MSE will post sequential gains during the next weeks.

USD/RUB fell to 30.61 from last week’s closing price of 30.83.

If you want to comment on the Russian Ruble’s recent action or have any questions regarding this currency, please, feel free to reply below.

Dollar Around 09′ Record Low as Risk Appetite Grows

The dollar continued its bearish trend against a basket of currencies after a report on U.S. pending home sales posted the third consecutive monthly rise, improving optimism on markets and extending the current risk appetite wave.

Commodity-linked currencies like the Australian dollar and the Brazilian real continued their rally against the greenback as confidence emerges about the world economic rebound, spurring demand for oil and several metals. U.S. pending home sales report had the highest jump in a 7 year period, and being considered as one of the key factors for an eventual economic recovery, this report fueled demand for riskier assets both in stock and currencies markets, consequently downgrading attractiveness of safe-haven currencies like the dollar and the yen. Since the global recession has been showing solid evidences of easing, the greenback is losing versus commodity-linked currencies like Canada’s dollar, and also against higher-yielding options like the euro.

Analysts affirm that not only the world economic rebound is weighing on the dollar outlook, but also the growing questioning on the dollar’s position as a world reserve currency. Since the beginning of the global slump, multiple statements from different governments and economists suggested that the dollar should be substituted as the main global reserve currency, this kind of declarations bring a certain amount of instability for the greenback, consequently weakening the North American currency.

AUD/USD traded at 0.8196 from 0.8070. USD/CAD remained rather stable at 1.0878 after a sharp fall in the beginning of the week. USD/BRL fell to 1.9230 from 1.9430.

If you want to comment on the U.S. dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.