Connect with us

Spread & Containment

Russian Ruble Flat As October GDP, Retail Sales Disappoint

Russian Ruble Flat As October GDP, Retail Sales Disappoint

Avatar

Published

on

The Russian ruble is trading relatively flat against several currency peers to close out the trading week. The ruble has witnessed a resurgence this week as foreign exchange traders poured into the currency amid a significant rally in Brent crude oil prices. But the gains may have been capped by disappointing economic data. With tighter lockdown restrictions in Europe, could the ruble come under pressure in the home stretch of 2020?

According to the Ministry of Development, the gross domestic product (GDP) contracted 4.7% year-over-year in October, down from the 3% drop in September. This represented the seventh consecutive monthly decline in the annualized GDP rate as the coronavirus pandemic continues to hurt Moscow.

On Friday, the Federal State Statistics Service (FSSS) reported that retail sales tumbled 2.4% last month from the same time a year ago, up slightly from the previous month’s 3% decline. This was the seventh straight monthly contraction in the retail trade, driven by sliding sales in food and non-food products.

Meanwhile, real wage growth ballooned 2.2% year-over-year in September, while the unemployment rate remained the same at 6.3% in October.

Earlier this week, producer prices picked up steam last month. The producer price index (PPI) jumped 0.3% in October, bringing the annualized increase to 0.7%. Industrial production plummeted 5.9% year-over-year, beating the market forecast of 6.1%.

The COVID-19 public health crisis continues to hammer Russia, with daily infections topped 24,000. In total, Russia has reported 55.6 million cases, with a death toll of more than 35,000.

The ruble did find support this week from rising energy prices. January Brent crude futures rose $0.04, or 0.09%, to $45.00 per barrel on London’s ICE Futures exchange. January natural gas futures surged $0.058, or 2.17%, to $2.779 per million British thermal units (btu). Brent will enjoy a weekly gain of nearly 6%, while natural gas suffered a 9% weekly plunge. Russia is an energy-rich nation, so any significant change in prices – high or low – can affect the ruble and the broader national economy.

The ruble has been one of the worst-performing currencies this year, plummeting more than 20% against the US dollar.

The USD/RUB currency pair dipped 0.02% to 76.22, from an opening of 76.23, at 19:23 GMT on Friday. The EUR/RUB slipped 0.11% to 90.41, from an opening of 90.51.


© AndrewMoran for Forex News, 2020. | Permalink | No comment | Add to del.icio.us
Post tags: , , , , , , , , , ,

Feed enhanced by Better Feed from Ozh

Read More

Continue Reading
Advertisement