Record One-Day Rise In The Dollar: What Exchange Rates Can We Expect In July?

Expert Forecast.

Last week, exchange rates foreign exchange rates on the Belarusian financial market had virtually reversed the ruble’s appreciation seen in the first half of this year. In his regular review for myfin.by financial analyst Mikhail Grachev.

Friday’s Record High for the Dollar

The U.S. dollar exchange rate on the Belarusian Currency and Stock Exchange rose by +3.46% over the week, with a record change of +2.223%, or 630 points, on Friday, June 26. The closing rate on the Belarusian Currency and Stock Exchange was USD/BYN 2.8858. The dollar’s year-to-date decline narrowed to -0.58%, while weekly trading volume was below average at $60.497 million. Moreover, one-third of the total trading volume occurred on Friday, when the market saw its highest volatility in the last three years.

The exchange rate of the Russian ruble on the Belarusian foreign exchange market followed a similar downward trend over the past week and, by the end of the week, having lost 1.28%, settled at RUB/BYN 3.7443 per 100 Russian rubles. By the start of the year, the Russian currency’s appreciation had slowed to +1.04%. Meanwhile, ruble trading volume remained significantly above average at 21,913.130 million rubles, or approximately $284.33 million.

The Dollar’s Surge on the Russian Market

On the Russian financial market, the U.S. dollar exchange rate experienced its sharpest surge since June 2022. Last week closed at USD/RUB 78.875, and the dollar continued to rise right up until the market closed. The Russian financial market tends to attribute such a sharp rise in the dollar to a significant drop in global oil prices, which closed on Friday at 72.60 USD/br for Brent crude. In addition, the dollar has strengthened against major financial assets in the global market.

Gold and the Dollar Against the Euro

The price of the August gold CFD futures contract fell to 3,975.70 USD/oz last week but managed to recover to 4,096.30 by the end of the week. Open interest for the August expiration is declining and stood at 114,770 contracts at the close of trading last week. For the gold market, this is a relatively small volume, indicating a decline in speculative interest in the asset.

The EUR/USD currency pair fell to 1.1325 last week but settled near 1.1382 by the end of trading. The DXY Dollar Index confidently broke through the 100-point mark and closed at 101.130 on Friday. p.p. The U.S. dollar’s rise is occurring against the backdrop of consistently strong labor market data, which may be reinforced later this week.

Weekly Forecast

Thus, in the last days of June and early July, the overall picture on the Belarusian foreign exchange market is unlikely to change significantly. The Russian ruble—and with it, the Belarusian ruble—will remain under pressure, which could push the dollar’s exchange rate on the domestic market up to USD/BYN 2,900–2,910. The Russian ruble on the Belarusian market could fall to RUB/BYN 3.720 per 100 Russian rubles. The dollar-to-euro exchange rate on the over-the-counter Forex market may also decline to the EUR/USD 1.1250 range.

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