23 May 2014
EMEA EM Express: Ukrainian presidential elections in focus
FXStreet (Łódź) - Ukrainian presidential elections, which will take place on Sunday, are the main focus in the EMEA sphere. The frontrunner for the office is billionaire chocolate tycoon Petro Poroshenko, who promises to strengthen democracy in the country and tighten relations with Europe. His victory appears a foregone conclusion, according to the polls, possibly even in the first round. The results of the election should be announced before June 4.
The winner of the election will have a very tough job from the outset, from dealing with the separatist in the eastern part of the country to tackling the urgent economic problems. The threat of Russia interfering with the elections has declined somewhat, as the West threatened to broaden sanctions against it in case of any disturbance. In the opinion of Deutsche Bank's analysts Yaroslav Lissovolik and Artem Zaigrin: "Russia will tacitly accept the results of the elections (de facto but likely not de jure) in case the turnout is broadly in line with rates of participation observed in the previous presidential elections.”
On Friday Russian President Vladimir Putin said that the sanctions imposed by the EU and the US so far were affecting Russian businesses but not the entire economy. He assured that he would cooperate with the new Ukrainian president, as he wants the situation in the neighboring country to be calm and peaceful. For the first time Putin stated that the choice of Ukrainians would be respected and that it was understandable that they wanted their country to emerge from the crisis.
"It would have been better to hold a referendum and adopt a new constitution. Under the current constitution Yanukovych is still in power," he added however.
Putin also expressed concern with Kiev's plans to join NATO and urged the Ukrainian authorities to stop its military operation against pro-Russian separatists in the eastern part of the country.
Meanwhile on Thursday the South African Reserve Bank announced its decision to hold its key lending rate steady at 5.5% for the second consecutive meeting.
Richard Kelly, Head of European Rates and FX Research at TD Securities comments: "It is currency and supply-side factors that have driven inflation above target and will likely keep it there all year, but with such tremendous weakness domestically in demand-side factors, there will be only a limited probability of seeing those primary price pressures being entrenched in second-round effects.”
"Gov. Marcus’ language made clear that the tightening cycle will remain and pass-through from the currency is ongoing and may be even faster. But until there is at least some pickup in demand, and with the global environment still conducive to currency strength, they can afford to be patient.”
Economic data
Russia's Unemployment Rate slid for the second running month, from 5.4% in March to 5.3% in April, data showed on Thursday. Analysts expected no change.
Russian annual Retail Sales, also released on Thursday, edged up 2.6% in May, down from 4% in April and below expectations of a 3.7% rise.
On Friday Turkey informed that Manufacturing Confidence improved to 113.3 in May, from 112.7 in April. Meanwhile, Capacity Utilization remained unchanged at 74.4%.
Technicals
The Ukrainian hryvnia was up 0.13% at 11.7151 against the greenback on Friday, ahead of the crucial presidential elections this weekend. Since the beginning of the year the currency has weakened by 31%.
The Russian ruble continued climbing on Friday, heading towards its forth weekly gain. It added 0.1 percent to 39.9593 against the central bank’s target dollar-euro basket. USD/RUB was falling by 0.58% at 34.1006 at the moment of writing.
On Thursday the USD/RUB daily FXStreet Trend Index was slightly bearish, with the OB/OS Index oversold. RSI was at 23 at the last close, and has climbed to 31 so far today. Daily 2-StDev Volatility Bandwidth was expanding at 5295 pips, with ATR (14) shrinking at 2922 pips. The 1D 200 SMA was at 33.9151, while the 1D 20 EMA was at 34.9842.
The South African rand strengthened to a one-week high on Thursday following SARB's announcement, against expectations. The currency was trading at 10.3431 to the dollar, and at 14.1200 per euro.
The USD/ZAR daily FXStreet Trend Index was strongly bearish, with the OB/OS Index neutral. RSI was at 40 at the last close, and has slid to 36 so far today. Daily 2-StDev Volatility Bandwidth was shrinking at 1057 pips, with ATR (14) expanding at 1149 pips. The 1D 200 SMA was at 10.4308, while the 1D 20 EMA was at 10.4200.
The winner of the election will have a very tough job from the outset, from dealing with the separatist in the eastern part of the country to tackling the urgent economic problems. The threat of Russia interfering with the elections has declined somewhat, as the West threatened to broaden sanctions against it in case of any disturbance. In the opinion of Deutsche Bank's analysts Yaroslav Lissovolik and Artem Zaigrin: "Russia will tacitly accept the results of the elections (de facto but likely not de jure) in case the turnout is broadly in line with rates of participation observed in the previous presidential elections.”
On Friday Russian President Vladimir Putin said that the sanctions imposed by the EU and the US so far were affecting Russian businesses but not the entire economy. He assured that he would cooperate with the new Ukrainian president, as he wants the situation in the neighboring country to be calm and peaceful. For the first time Putin stated that the choice of Ukrainians would be respected and that it was understandable that they wanted their country to emerge from the crisis.
"It would have been better to hold a referendum and adopt a new constitution. Under the current constitution Yanukovych is still in power," he added however.
Putin also expressed concern with Kiev's plans to join NATO and urged the Ukrainian authorities to stop its military operation against pro-Russian separatists in the eastern part of the country.
Meanwhile on Thursday the South African Reserve Bank announced its decision to hold its key lending rate steady at 5.5% for the second consecutive meeting.
Richard Kelly, Head of European Rates and FX Research at TD Securities comments: "It is currency and supply-side factors that have driven inflation above target and will likely keep it there all year, but with such tremendous weakness domestically in demand-side factors, there will be only a limited probability of seeing those primary price pressures being entrenched in second-round effects.”
"Gov. Marcus’ language made clear that the tightening cycle will remain and pass-through from the currency is ongoing and may be even faster. But until there is at least some pickup in demand, and with the global environment still conducive to currency strength, they can afford to be patient.”
Economic data
Russia's Unemployment Rate slid for the second running month, from 5.4% in March to 5.3% in April, data showed on Thursday. Analysts expected no change.
Russian annual Retail Sales, also released on Thursday, edged up 2.6% in May, down from 4% in April and below expectations of a 3.7% rise.
On Friday Turkey informed that Manufacturing Confidence improved to 113.3 in May, from 112.7 in April. Meanwhile, Capacity Utilization remained unchanged at 74.4%.
Technicals
The Ukrainian hryvnia was up 0.13% at 11.7151 against the greenback on Friday, ahead of the crucial presidential elections this weekend. Since the beginning of the year the currency has weakened by 31%.
The Russian ruble continued climbing on Friday, heading towards its forth weekly gain. It added 0.1 percent to 39.9593 against the central bank’s target dollar-euro basket. USD/RUB was falling by 0.58% at 34.1006 at the moment of writing.
On Thursday the USD/RUB daily FXStreet Trend Index was slightly bearish, with the OB/OS Index oversold. RSI was at 23 at the last close, and has climbed to 31 so far today. Daily 2-StDev Volatility Bandwidth was expanding at 5295 pips, with ATR (14) shrinking at 2922 pips. The 1D 200 SMA was at 33.9151, while the 1D 20 EMA was at 34.9842.
The South African rand strengthened to a one-week high on Thursday following SARB's announcement, against expectations. The currency was trading at 10.3431 to the dollar, and at 14.1200 per euro.
The USD/ZAR daily FXStreet Trend Index was strongly bearish, with the OB/OS Index neutral. RSI was at 40 at the last close, and has slid to 36 so far today. Daily 2-StDev Volatility Bandwidth was shrinking at 1057 pips, with ATR (14) expanding at 1149 pips. The 1D 200 SMA was at 10.4308, while the 1D 20 EMA was at 10.4200.