The main event of this week - the meeting of the US Federal Reserve - is behind us, and now the markets will focus on one topic until the end of next week - the British referendum on the country's membership in the EU, scheduled for June 23 (Thursday).
The fact that the economic calendar until the referendum is extremely scarce will also contribute to the dominance of this topic in the information space.
In the face of uncertainty about the results of the British referendum and its consequences, demand for safe-haven assets is growing - government bonds, gold, Japanese yen, Swiss franc, US dollar.
Risky assets, on the contrary, came under pressure - for example, oil quotes are already testing the level of $48 per barrel of Brent. For the ruble, this is certainly a negative, and if oil fails to stay above $48, on Friday the dollar/ruble pair will move into the range of 66.00 - 66.50 rubles. At the same time, an important driver of oil futures movements on Friday evening will be the weekly report of oilfield services company Baker Hughes regarding the number of operating oil rigs in the US.
As for the euro, the single European currency is one of the main victims of the fears associated with the upcoming referendum, and therefore tomorrow I expect it to close in the range of 73 - 73.50 rubles.
Of the next week's reports, only the reports concerning oil industry USA - US Department of Energy report on commercial oil reserves and production (issued weekly on Wednesdays) and Baker Hughes report on the number of active drilling rigs (issued weekly on Fridays).
At the same time, it is obvious to everyone that the outcome of trading on foreign exchange market on the next week determine the British plebiscite. At the same time, not only its results, but also a possible reaction to them remain in question. financial markets, the scale of which is extremely difficult to predict due to the fact that many players will make decisions under the influence of emotions or speculative considerations.
Today, we can only assume that the market will react to the victory of the EU supporters by buying euros and a surge in demand for risky assets, including oil. In this case, the dollar may moderately decline against the ruble (by 30-50 kopecks), while the euro, on the contrary, will show a noticeable strengthening, rising to 75 rubles.
If the euroskeptics win, the reaction will be the opposite, and the initial movements in the foreign exchange market can be very strong. A sharp drop in the euro to 72.50 rubles cannot be ruled out. The dollar, on the contrary, is able to grow under the mark of 67 rubles against the backdrop of falling oil prices, which can reach 47 dollars per barrel.
A British young couple won 50 million euros in the lottery and bought a luxury house for a million and a half. Five years later, it has become a haven for rats and a paradise for drug addicts, and the neighbors, who have not even seen the new owners, are going to sue them.
Matt and Cassie Topham are 28 years old. Not so long ago, they worked as a house painter and saleswoman in the small town of Stapleford, Nottinghamshire, England. In 2012, their lives changed: they won £45 million (about €50 million) in the EuroMillions lottery. The couple decided to buy a house.
The choice fell on a huge mansion built in the 1930s in the same Nottinghamshire. The house has seven bedrooms, several bathrooms, a garden and a huge lawn. This pleasure cost 1.2 million pounds (slightly more than 1.3 million euros). Here's what the house looked like in 2012:
Here's what it looks like five years later:
The Topems' neighbors hardly saw them on the territory and complain to journalists that the once lovely place has turned into a dump and a haven for drug addicts. There were rats in the area. Adam Hill, a neighbor, told The Sun what the once beautiful and well-maintained house has become.
The Tophams have a mountain of money, and they would do well to spend a little to stop this farce - or at least for security. A local Snapchat group calls the house "The scariest place in Nottingham for a selfie." And that's why young people are constantly climbing there. The toilets are broken, rats crawled through the pipes and made a home for themselves there. There is an empty pool in the yard, this is also dangerous, someone can be seriously injured.
Two or three times a year the neighbors call the police, but to no avail. Syringes are found in the house. Young people and teenagers who climb there have completely destroyed the interior. There is a four-meter fence around the site, but it does not prevent anyone from climbing inside through the holes.
Cassie and Matt, as the press wrote, eventually decided to demolish the historic building and build a new house there. But so far there is no talk about it.
It's just jungle. Topems tried very hard to make us dislike them.
The Topham Mansion was formerly known as the Rainbow House. The lot at the back is right next to Bruce Wayne's house from The Dark Knight Rises. So the place is not easy. However, the new owners were going to do a complete renovation and build a £5 million eco-house that would look like a Teletubbies home.
A photo: Artem Geodakyan/TASS
The net outflow of capital from the eurozone has reached a maximum since the existence of the single European currency. This trend will lead at least to the parity of the euro and the dollar next year, and in a negative scenario - to the fall of the euro below the dollar, analysts say.
Net capital outflows from the eurozone in the 12 months ending September 2016 reached record highs, The Wall Street Journal reported, citing data from the ECB.
Per reporting period European investors bought shares and bonds outside the zone for €497.5 billion ($516.5 billion). At the same time, international investors sold or waited for $31.3 billion of eurozone bonds during the year. Thus, the net capital outflow from the eurozone amounted to €528.8 billion, which was the maximum since the introduction of the euro in 1999.
Against this background, the euro continues to fall against the dollar. A number of analysts interviewed by the publication believe that in 2017 the euro will reach parity with the dollar. In particular, TD Securities analyst Ned Rampeltin expects the euro to fall below the dollar in the first months of next year. Analysts at Morgan Stanley and Goldman Sachs expect currency parity to be set by the end of 2017. Deutsche Bank predicts that the euro will fall to at least $0.95 in 2017 amid increased capital outflows from Europe.
On December 14, the US Federal Reserve System (FRS) raised the base rate to 0.5-0.75% for the first time since December 2015. The rate of increase in the base rate is expected to accelerate further, while the ECB rate is still zero.
In December, before the Fed meeting, according to Consensus Economics, analysts predicted that the euro would reach $1.057 by the end of 2017. But the dollar rose 2.5% against the euro after the Fed outlined its plans to raise rates three times in 2017, rather than twice as the Fed said in October.
"The last time this happened was within a few months in 1979 and 1997, when the dollar rose 30% and 20%, respectively," Deutsche Bank strategist George Saravelos said. The dollar rally could have serious repercussions, boosting inflation elsewhere and reducing US exports.
Rejection of the euro
Chapter investment company Burnbrae Group Jim Mellon, who was worth more than $1 billion in 2014, previously told Bloomberg that increased dissatisfaction among EU residents with EU government policies will lead to the collapse of the bloc over the next five years.
Mellon expects the euro to fall below parity "sometime next year", but he is in no hurry to sell the European currency, as he hopes to capitalize on short-term fluctuations.
“Brexit will be a side event amid the problems that are brewing in Europe. The euro is currently an extremely inconvenient instrument. I think he will live another one to five years,” Mellon said.
Many do not stop wondering what will happen to the euro in the near future. unstable economic situation in the world forces people to look for ways to save their savings, and conversion into foreign currency is seen as one of the possible directions. We focus on the fact that today experts are in no hurry to make forecasts, since most of them have turned out to be erroneous in the past six months.
In March 2015, most analysts were talking about the strengthening of the dollar against the euro. There were forecasts that by 2017 the American currency will be completely equal to the European one. Despite the pullback that could be observed throughout April, the situation has not yet stabilized. It is too early to say that the negative dynamics of the euro has finally changed.
The beginning of May was marked for the European currency by trading at the level of 1.1. Such world agencies as Goldman Sachs, Barclays and BNP Paribas stated that the "European" will reach this price mark only by the end of 2015. A more optimistic forecast was given by representatives of Wells Fargo, focusing on the level of 1.22. We can talk about a dual version of the development of events. Two directions are considered: a fall to the level of a 2-year low and an increase to a figure of 1.22.
In the first half of 2015, experts expect GDP growth at the level of 1-2%. For Europe, this figure can be considered more than positive. Expected macroeconomic indicators set up a positive forecast for the euro. This is an unemployment rate of around 9.5%, which relatively recently was estimated only in double digits, as well as inflation at 1%.
Experts attribute the fall of the European currency against the dollar to the more active development of the American economy over the past two years. Despite the expected growth of the euro in the next couple of years, today the rate is constrained by many factors. It can be said about the reduction industrial production in Germany and many other major countries. The problem is hidden in the uneven development of the EU states. The northern regions are only recovering today after a long stagnation.
Mario Draghi, in his last spring speeches, repeatedly said that he intends to take all measures to reduce public debt. This cannot but affect the euro exchange rate. Agency representatives say that the negative trend will be supported by the relative openness of the European trade area, as well as the presence of deflationary pressure. An outflow of portfolio-type investments was recorded, where the euro plays the role of the funding currency.
It is worth noting the fact that the EU has a certain dependence on gas, which is imported from Russia, as well as on the import of its goods into the territory of the Russian Federation. The volumes of both gas and imports are declining today due to sanctions that leave a negative imprint on the EU states. Despite the current trend, the euro rate, according to the forecasts of world analysts, will not grow for a long time. Investors no longer hope for the strengthening of the European currency. As experts say: "the era of the dollar is in full swing." The only thing left to hope for is restrictive actions on the part of the US government, which will keep the national currency at a certain level.
Considering the question of what will happen to the euro in the near future, many experts are trying to impose on the course formation process the situation with Greece. Analysts of the world agency Stratfor consider only two options for further developments:
Considering what will happen to the euro in the next few years, Goldman analysts are voicing the exchange rate at $0.9 = already by 2017. Experts do not stop talking about the threat of deflation and about almost zero, and in some places even negative growth in the economy. Since the beginning of 2015, the European National currency fell by 2.6% against the currencies of 9 countries. Prior to parity with the dollar is relatively short, only about 15%.
It is worth recalling that the euro exchange rate has already fallen to the same level with the US currency in 2012. At the end of 2014, the euro lost almost 12% of its value. According to Chris Iggo, head of fixed income at AXA Investment Management, parity can be achieved if monetary policies The ECB and the Fed will remain the same. Let us mention that back in autumn 2014, the ECB lowered the deposit rate by 0.2%. Echoes of Draghi's message about the purchase of sovereign bonds of European countries and the implementation of the next stage of the quantitative easing policy are noticeable today in the format of the fall of the EUR/USD pair.
Today's pullback of the euro to the north is a direct consequence of the actions taken by the ECB at the end of 2014. It's about reducing interest rate from 0.15% to 0.05% and a decrease in the rate on deposits, which was mentioned earlier. These record low figures for the European area stimulated active lending by banks to the real, rather than the financial sector of the economy. Only six months later, after the adoption of drastic measures by the ECB, the European economy began to gradually recover. Recall that no one guessed about the rate cut. Such a scenario seemed possible only to six economists out of fifty-seven surveyed.
Despite the fact that the outlook for the euro against the dollar remains negative, the ruble/euro ratio will be completely opposite. The European currency against the ruble will continue its growth in the near future. The weakening economy of Europe against the backdrop of Russia is in a very advantageous position. The situation is due to the events taking place in the world oil market. In parallel with the fall in oil prices, the euro will also rise. Despite today's rise in oil prices, experts are still waiting for the price of black gold to drop to the January minimum, so we can count on a second jump in the growth of the euro in Russia. Do not forget that the forecast remains a forecast, and it is highly likely that the ruble will begin to strengthen its position.
Expert opinions regarding the euro differ and are distinguished by their optimism. Deutsche Bank believes in falling below parity and stops at $0.95 per euro by the end of 2017. The author of the forecast, George Saravelos, is based on the fact that in 2000 the euro/dollar pair was trading at 0.8300. Due to the wave structure of exchange rate fluctuations with a frequency of seven to nine years, Deutsche Bank experts do not see anything catastrophic in the situation.
The British bank HSBC gives a slightly different forecast for the euro. The experts of the financial institution are confident that by the end of 2015 the euro against the dollar will trade at 1.19. Representatives of Barclays prefer the level of 1.1, which can be seen today, but Morgan Stanley's experts tend to 1.14.
At the moment, it is problematic to say how the euro will behave in the future. The price today is not stabilized, in fact, like the EU economy itself after the crisis, not only at the end of 2014, but also in 2008-2009. The difficult actual situation does not prevent many analysts from believing in the very promising future of the European currency. It remains only to see what happens to the euro next.
To begin with, it is worth noting that the euro is foreign currency, which ranks second in the ranking of monetary units for which hard times have come today. There are many reasons for the depreciation of the euro at the moment, the situation as a whole was also affected by Greece, which is mired in debt, like in silks, and refuses to repay its debts to direct debtors. To give accurate forecasts, what will be the exchange rate of the euro against the ruble at the end of 2019 is difficult, but international experts still predict a period when the euro will fall even more. This will be discussed in this article.
The exchange rate of the euro against the Russian ruble depends primarily on the following factors:
If in the fall of 2015 the euro was 70.38 rubles, then in the second half of January it is expected that the euro will reach 74.35 banknotes in the national currency.
Most high performance rubles fell in April-May 2015, when the euro fell to the value of 52.9 rubles. In June foreign currency unit was calculated already at 61.95 rubles, at the end of July this figure changed to 67 rubles. As of August 14, 2015, the euro remained at around 65 rubles.
