The Dollar Is Approaching Its High

What exchange rates can we expect in mid-July?

Last week marked the end of the first half of the current fiscal year, and for the Belarusian foreign exchange market, the results of the first half of the year were neutral. In his regular review for myfin.by financial analyst Mikhail Grachev.

Exchange rate returns to early-year levels

At the close of trading on the Belarusian Currency and Stock Exchange on Tuesday, July 2, the U.S. dollar exchange rate stood at USD/BYN 2.9050, up 0.67% over the past week. Overall, the change in the dollar exchange rate since the start of the year was +0.08%. In other words, the exchange rate has returned to the levels at which 2026 began. Nevertheless, despite the shortened trading schedule due to the public holiday on Friday, July 3, the trading volume in U.S. dollars amounted to 68.433 million U.S. dollars, which is slightly above the average weekly figures.

The Russian ruble’s exchange rate on the Belarusian Stock Exchange (BSE) lost ground slightly over the same four trading days, down 0.34%, but has moved into positive territory since the start of the year, with the ruble strengthening by 0.69%. The closing exchange rate for the ruble last week was RUB/BYN 3.7314 per 100 Russian rubles. Trading volume for the partial week was 21,316.16 million rubles, or approximately 273.81 million U.S. dollars.

Key Events of the Week

Due to the close alignment of public holidays on the Belarusian and U.S. financial markets (July 3 in Belarus and July 4 in the U.S.), the main events in the global financial market took place on Thursday, July 2. It was on this day, Thursday, that U.S. labor market statistics were released, which are currently the focus of intense attention.

As a reminder, the U.S. Federal Reserve saw a change in leadership at the end of April, and the new chairman, Kevin Warsh, was expected to follow the policies of President Donald Trump. However, at the June meeting of the Federal Open Market Committee (FOMC), Mr. Warsh demonstrated his independence. At the concluding press conference, he hinted at a likely tightening of monetary policy, which does not align with Trump’s expectations. Hence the not-unrelated surge in interest in the July NFP data, which came in significantly below forecasts. Against this backdrop, on Thursday and Friday during Asian trading, the U.S. dollar retreated against major assets.

The Dollar and Other Assets

The EUR/USD currency pair rebounded from a local low of 1.1325 and closed last week near 1.1437. The price of gold futures also reversed course and began rising, rebounding from last week’s low of 3,975.0 USD/oz to reach the 4,200.0 USD/oz level. It is difficult to say at this point whether the rally will continue this week, but according to statistics from the World Gold Council (WGC), the world’s largest central banks are continuing to buy monetary gold. The volume of gold purchased is slightly below the highs of 2023 and 2024, when central banks bought more than 1,000 metric tons of gold during the year, but it still remains at a very high level.

On the Russian financial market on Friday, the U.S. dollar exchange rate also strengthened slightly by the close of trading to USD/RUB 77.31. Discussions on monetary policy also continued in Russian financial circles last week. In particular, an exchange of views took place between Bank of Russia Governor Elvira Nabiullina and Sberbank CEO Andrey Gref regarding the current key rate.

While opinions differed on the reasons behind the current decisions, the participants in the debate agreed on the need to ease monetary policy. This may signal some movement in the financial market, but it appears that major developments may begin to unfold closer to fall. It’s no coincidence that there’s an expression called “the August curse of the ruble,” when the active formation of the exchange rate begins as the summer season ends.

Forecast for the Week

Thus, given the dollar’s weakening on the global market at the end of last week and the reopening of the U.S. market after the holiday, we can expect the dollar’s exchange rate to soften on the Belarusian foreign exchange market. However, by the end of the week, the situation may stabilize, and the dollar may resume its upward trend. For now, the dollar is fluctuating within a narrow range around USD/BYN 2.90–2.93.

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