The dollar won't fall

The opinions of Russian and foreign foreign exchange market participants regarding the dollar exchange rate in 2006 turned out to be directly opposite. Domestic traders and analysts do not believe in the growth potential of the American currency next year and expect that its exchange rate against both the euro and the ruble will gradually decline. But their Western colleagues, on the contrary, recommend buying dollars next year, hoping that the American central bank will pursue monetary policy more strictly.

The head of the foreign exchange and financial operations department of Alfa Bank, Igor Vasiliev, believes that in the coming year the dollar exchange rate in Russia will most likely remain within the range of 28-29 rubles. for a dollar. “I think that in the medium term, dollar quotes against the euro on world currency markets will decline,” he believes. -- And although both in the US and in the eurozone, regulators have made it clear that they intend to raise interest rates next year, in the EU countries, in my opinion, this policy will be pursued more consistently. Essentially, the potential for interest rate growth in the US has been exhausted. I do not exclude that during the year the Federal Reserve System may raise the rate once or twice, but the European Central Bank has much more opportunities to tighten monetary policy (currently the rate in the USA is 4.25% per annum, and in the EU - 2.25% per annum. - Ed. ). Over the course of the year, the gap between rates will decrease. I don’t expect much volatility in the market; it is quite possible that within a year the euro/dollar quotes will be in the range of $1.25-$1.3 per euro.”

But Western analysts and traders are more optimistic about the fate of the dollar next year. ECU Group Plc analyst Neil Mackinnon hopes that the dollar will continue to rise further. “Rate hikes have supported the dollar all year. The more efforts the Fed makes, the more I do not expect changes in the dynamics of the dollar. Over the next three months, the dollar could rise to $1.15 per euro.” Foreign analysts expect that by June 2006 the Federal Reserve will raise the rate twice more - to 4.75% per annum, and the European Central Bank - only once to 2.5% per annum.

Natalia ROMANOVA