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Today there were few dollar buyers in the cashless market
On December 2, the dollar exchange rate on the interbank market collapsed by 18 kopecks and trading ended at 28.33-28.35 UAH / $. However, the bankers somehow did not firmly believe in the trend of a long-term exchange rate depreciation. This is evident from the prices at the box office.
The average dollar exchange rate for cash sold to people fell by only 1 kopeck. But it plunged heavily in the rescue of people, immediately at 5-10 kopecks. As a result, at night on the interchanges were the following rates:
- 28.58-28.70 UAH / $ – on sale;
- 28.25-28.40 UAH / $ – for purchase.
This suggests that bankers admit the opposite movement of the exchange rate in the cashless market and want to hedge the cash.
Today there was a spontaneous collapse in the interbank currency market. At the opening of the trade, the rates were still quite high: first at 28.47-28.52 UAH / $ and then 28.47-28.48 UAH / $. But then they rolled roughly. This happened after it became clear that there would be no significant demand for the currency and that the dollar would fall on the international market (where the rate of the euro rose again).
“There were not many buyers of the US currency, the regulator did not buy the dollar either. Therefore, the prices fell. Also, the situation in the international market, where the euro rose and the dollar fell, had an impact,” commented the financial analyst Vasily Nevmerzhitsky on Strana’s mood.
Foreigners have been buying non-cash dollars in recent days. There was unofficial information that these purchases were made with dividends from foreign companies. But today there were no non-residents, they completed their transactions.
“Oil Painting: There are no buyers, and the relatively small supply of foreign currency deeply disrupts the market. Non-residents, as expected yesterday, bought the dollar against dividends and left,” said Andrey Shevchishin, Forex chief analyst. Club, in an interview with Strana.
Among the reasons for the sharp collapse of the dollar rate, they also mentioned the gradual sale of the dollar by the main players and the speculative game. If you put all the factors together, there are six of them:
- A pause in the purchase of dollars by foreigners and a low demand for foreign currency by Ukrainian importers. The Cabinet of Ministers today canceled the weekend quarantine, but did not make a final decision on the total closure, about which there were many rumors. Of course, entrepreneurs are not going to risk the unpredictability of the government, they do not need new losses. The volume of new supplies of imported products to Ukraine is declining as companies are not sure they can sell them to consumers.
- There is little demand for US currency from the public, that is, from the cash market.
- Decrease in the dollar exchange rate on the world market and rise in the price of the euro. Everyone understands that this will lead to more active sales of the euro, which normally strengthens the hryvnia.
- Dollar sales by phases by Naftogaz. There is a persistent rumor in the market that the state company is systematically selling its dollar (mainly through Ukrgasbank) to help the Finance Ministry cover the budget deficit at the end of the year. They say they try to make sales as invisible as possible so as not to crash the dollar rate.
- Absence of the National Bank to buy dollars. The regulator took a break and did not appear in the auction for more than three weeks. Treasurers believe that the NBU can go out to buy if the interbank market reaches the level of 28.25 UAH / $.
- A speculative short game from some banks. They call it the buzzword “short”. This is when the dollar actively sells to trigger a selloff. The goal is to sell your dollar at the beginning of depreciation, say, at 28.47-28.48 UAH / $, as it was today. And when the market collapses to a low, say, 28.35 UAH / $ (or less), it is necessary to quickly buy back all of the currency sold earlier. Then the speculator will earn a good exchange difference.
Today’s news was Prime Minister Denis Shmyhal’s statement about the government’s plans to organize the $ 1 billion Eurobond placement around December 15. But it rang after the close of the interbank market.
“I don’t think the news has been recovered by the market, but of course it contains a positive part for the forex market,” Shevchishin said.
Tomorrow, December 3, financiers predict a wide opening of the interbank market: 28.30-28.38 UAH / $. Few believe that the dollar will continue to decline in price. But everyone understands that prices are unlikely to go up much without non-residents making purchases. Therefore, the movement of the exchange rate will depend on the actions of foreigners, as well as the exits of speculators interested in the growth of the exchange rate.
The factor with the payment of interest (coupon) on hryvnia government bonds may play a role: on December 2, the Ministry of Finance paid 1.45 billion UAH to holders of government bonds. Now everyone is wondering who got them. If there are foreigners among the recipients, they can go out and buy the dollar.
The euro rises in price due to the issuance of dollars
On December 2, the euro rate reached a new high: at the end of the day, it rose from $ 1.2046 / € to $ 1.2093 / € after being pumped within $ 1.2040-1.2108 / €.
Investors have been actively investing in the European currency after the October report on the decline in unemployment in the euro area from 8.5% to 8.4%. And also after the joint statements of the United States Secretary of the Treasury, Steven Mnuchin, and the head of the Federal Reserve, Jerome Powell, who asked the United States Congress to provide more assistance to small businesses in the face of the growing coronavirus pandemic. They began to talk about the redistribution of loans for 300,000 million dollars and also about their recycling. They want to convert the loans into grants, that is, into irrevocable financial aid. They also talked about state business tax incentives and other forms of support.
The world financial markets drew a conclusion from all of the above: there will be a new issuance of the dollar. Therefore, their rate went down and traders bought euros.
In Ukraine, the average euro cash rate increased from 15 to 20 kopecks at a time:
- 34.35-34.60 UAH / € – for sale;
- 33.80-34.05 UAH / € – for purchase.
