FINAM FOREX: EUR / USD – statistics from the US strengthens the dollar

05 April 2021

The exchange rate of the euro against the dollar in forex is still under pressure. US macroeconomic statistics show a confident recovery of the world’s largest economy after the COVID-19 pandemic: the index of business activity in the manufacturing sector from the Institute for Supply Management (ISM Manufacturing PMI) in March showed a record growth in 10 years from 61.3 to 64.7 points; the key indicator of employment outside the agricultural sector (Nonfarm Payrolls) for the same reporting period amounted to 916 thousand new jobs, and the overall unemployment rate fell from 6.2% to 6%. Against this background, the economic statistics of the Eurozone looks rather modest (Markit Manufacturing PMI rose from 62.4 to 62.5 points in March), and the potential third wave of the coronavirus creates risks of new restrictions.

The EUR / USD pair maintains a bearish trend towards the 1.1610 level. The growth of quotes is limited by the resistance area 1.1900-1.2000.

RUBLE – demand for foreign currency is growing

The ruble market is showing alarming dynamics due to the strengthening of geopolitical factors. The risk of an armed clash between the Russian Federation and Ukraine in the Donbass is added to the expectations of sanctions from the West, which may entail wider restrictions for the Russian economy, up to disconnecting from SWIFT and a ban on investing in public debt. Earlier, the debt market managed to avoid a collapse, bouncing off 144 points, but again went down because of the increased premium for geopolitical risk.

The dynamics of the Bank of Russia reserves reflects the high demand for foreign currency: since the beginning of March, their volume has decreased by $ 11.9 billion. Due to the continuing nervousness of investors, reserves are likely to continue to decline over the next week, which may well lead to further weakening of the ruble.

The national currency is trading in a narrow range of 75 rubles – 76.50 rubles, and there is still a chance of a breakout of the upper border and a rush to the level of 80 rubles per dollar.

The EUR / RUB pair seeks to continue the rebound from the 86.5 ruble area – 88 rubles in the direction of 91 rubles – 92 rubles per euro.

This information is not investment advice.

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