The Dollar Has Started To Rise

What will happen to the exchange rates at the end of July?

At the end of last week, the U.S. dollar exchange rate finally began to rise, and the latest trading in the dollar on the Belarusian Stock Exchange on Friday, July 17, closed at a rate of USD/BYN 2.8938. In his regular review, he discusses what exchange rates to expect at the end of July: MyFin financial analyst Mikhail Grachev.

Demand for dollars is rising

As of the beginning of the month and the year, the exchange rate remains down by -0.31%; over the past week, the dollar has risen by +0.84%. Such currency fluctuations are typical for the summer period, when the financial market is preparing for the fall season. At the same time, trading volumes in dollars remain relatively high on the Belarusian foreign exchange market, reaching $91.055 million last week. This indicates growing demand for foreign currency in general, and for the U.S. dollar in particular.

The exchange rate of the Russian ruble on the Belarusian foreign exchange market fell by -1.62% over the past week, settling at RUB/BYN 3.6963 per 100 Russian rubles. As of the start of the year, the ruble has seen a minimal decline of -0.26%. At the same time, ruble trading volume is significantly above average and totaled 26,321.26 million rubles for the week, or approximately 336.46 million U.S. dollars in equivalent value.

Moscow Exchange Plunge

But the worst developments last week occurred on the Russian stock market, where the index fell below its 2022 level. The MOEX Index broke through the psychological 2,000-point mark and closed the week at 1,958.43 points. A number of experts expect the market to stabilize around 1,800–1,900 points, while overall, the index has been falling for 19 consecutive weeks, and its market capitalization has declined by 25%. It is noted that large blocks of shares from virtually all leading companies across all economic sectors are being offered for sale.

It is possible that this very circumstance has revived demand for foreign currency in the Russian market amid a decline in supply from exporters. The U.S. dollar rose to 79.0 rubles on the Russian market last week but corrected to 78.30 rubles by the market close.

Overall, despite ongoing factors supporting the ruble—such as a high key rate, rising global oil prices, and the approaching tax payment period—the collapse of the Moscow Exchange adds a significant fly in the ointment.

Weekly Forecast

The global financial market continues to be in a frenzy caused by the escalation of the Middle East conflict. The latest escalation in the Strait of Hormuz has caused the price of “black gold” to soar to 85.0 USD/br for Brent crude. Against this backdrop, the global price of gold plummeted to a local low of 3,985 USD/oz, but stabilized around 4,018 USD/oz by the close of trading on Friday.

Growing market jitters are linked to the approaching U.S. midterm elections, which will take place in early November of this year. Donald Trump’s team faces the challenge of retaining its congressional majority, while Democrats are hoping for a comeback. As the election approaches, tensions will only intensify. However, significant events are expected next week on July 29, when the Federal Reserve’s FOMC will hold its next meeting.

Given this, the Belarusian foreign exchange market may continue to experience heightened volatility this week, with the dollar exchange rate trending upward. The USD/BYN pair can be expected to rise to 2.925. Meanwhile, the Russian ruble continues to decline.

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