In April 2018, the euro increased in value very quickly. The primary reasons are the new sanctions imposed by the United States on Russia, the tense situation around Syria.
Recently, an unstable situation has been noted on the financial market: the ruble is falling, the euro and the dollar are strengthening their positions. The national currency approached the minimum for the first time since 2016. Analysts say that the current situation is due to two main reasons: the sanctions, which are regularly imposed on Russia, and the tension over Syria. However, there is an opinion that this situation will soon change, and the wave of panic will subside.
The main reasons for the growth of the euro
Despite the difficult situation on the financial market in April 2018, the euro growth trends were observed earlier. They were not only in relation to the ruble, but also to the dollar. This is due to the fact that:
- The European Central Bank has outlined new rules for monetary policy. It is assumed that the regulator will be self-sufficient, will stop being so much cautious.
- Expectations for the growth of the EU economy. It is assumed that in the near future the eurozone will increase GDP growth. Positive expectations always have a positive effect on the euro.
- The consequences of the Catalan crisis have been overcome. Since the announcement of the results of the parliamentary elections, the euro has strengthened significantly.
Do not forget about the fact that the EU countries artificially overstate the exchange rate so that their own economies are not under attack during the crisis. If you have followed the course changes, you will notice that the growth is not very high. This is due to the growth of Germany's public debt. This country is the main donor of the Eurozone.
Euro growth in April 2018
The main reasons, as already noted, are related to the new sanctions against Russia. First of all, they had a negative impact on Rusal. The foreign market has become closed to many companies, most of whose debt is denominated in foreign currency.
In addition to everything, the price of the euro was affected by:
- rise in fuel prices;
- the decline in oil exports to the west;
- prior inflation;
- the state of the Russian economy.
As long as there are sanctions that impede the creation of favorable trade relations with countries, one cannot talk about the stability of the course. The situation can be restored only by an integrated approach, which would include the implementation of regular oil supplies to the west, the stabilization of the internal economic situation in Russia.
The reason is the squeezing of the "scissors" of the key rates of the Central Bank of the Russian Federation and the US Federal Reserve System. With a decrease in the rate in our country, investments in Russian assets become less interesting for foreign investors. The Ministry of Finance of the Russian Federation is also making some adjustments, which buys out currency in rather large volumes.
Expert forecasts
If a similar situation developed ten years ago, then the Russian ruble collapsed. Today, the Central Bank has enough experience to keep the ruble exchange rate. The chairman of the Russian Economic Society, Valentin Katasonov, said that in the medium term, the euro will continue to grow against the dollar. This is due to the statements made by the Central Bank and the heads of the central banks of the EU.
In addition, the period of "quantitative easing" is coming to an end. The money supply will decrease, that is, the number of bills issued will decrease.
Due to the rapid collapse of the Russian currency, Sberbank and Oleg Deripaska's companies were among the leaders in the fall. Losses of the Moscow Exchange indices amounted to 8, 3-11, 4%. This was the largest drop in the Russian stock market since March 2014.
There was a swing in the "currency swing", which led to the likelihood of a recession. Most of the inhabitants of our country have already experienced the rise in inflation. Therefore, there is a risk that the situation in 2014 will repeat itself.
In conclusion, we note that experts do not recommend panicking, starting to make investments in dollars or euros, since there is a possibility of getting into an unpleasant situation due to the weakening of the currency in the short term.
