EUR/USD vs USD/RUR
Why in Russia, with its national currency among traders trading on the market Is the EUR/USD currency pair more popular than the USD/RUR currency pair? Let's weigh the pros and cons.
Pros and cons of trading in the Russian ruble
Are there any obvious advantages to trading EUR/USD? First of all, there is the thought of lack of information on Russian macroeconomic statistics and the ruble in general. Many traders, looking at the huge amount of news published on countries using Euro and Dollar currencies, will surely point to the lack of information on the USD/RUR pair as the main reason. And they will make a mistake! The number of resources that cover the situation on the ruble and its relation to the euro or dollar is not so small. And choosing to trade on this pair, you certainly won't have an information vacuum.
Second, deterrents can look like spreads and commissions on USD/RUR pair. If on EUR/USD we have already got used to the fact that the average spread is 2 pips, and on five-digit quotes from 0.5 pips, then on the USD/RUR pair spread can vary by times at different brokers. In addition, the leverage, transaction volumes, execution and other trading characteristics of EUR/USD look a little more favorable. And, indeed, it does not really matter to a trader what to trade, the main thing is that there are small commissions, availability of information and high liquidity.
Ruble liquidity periods
Speaking of liquidity. USD/RUR is actively traded during the business hours of the Moscow stock exchange. After the close, the liquidity of the pair decreases and a sideways movement is clearly visible on the chart, which is called a "saw" in the slang of traders.
There are brokers that do not show these periods in the terminal, i.e. trading is closed at 24:00 and opened only at 8:00 (according to the server time), thus forming a familiar chart similar to EUR/USD.
Among other things, the most popular platform today is MetaTrader 4, in which every broker has the EUR/USD currency pair, and some of them also have USD/RUR available for trading. In any case, almost everyone has indicative quotes USD/RUR и EUR/RUR.
Big Mac Index and Yandex trading
How can you predict the ruble exchange rate against the dollar or euro? All methods of fundamental, technical or graphical analysis are quite applicable. Moreover, there are quite interesting non-traditional methods of analysis. For example, there is the Big Mac index (it is an unofficial way of determining the purchasing power parity of national currencies, and a standard sandwich produced by McDonald's is taken as a basis). Thus, in the U.S. for a Big Mac you will have to pay 4.33 dollars, and in Russia - 2.29 dollars (75 rubles), that is, the ruble is devalued by almost 53 %.
I will show you another rather non-standard way of trading ruble pairs. Let's call it conventionally: "Trading on the Yandex home page". Yes, yes, you heard me! The idea is quite simple, which is what lures beginners in traders. So, what we need to work: open the main page of Yandex and look for exchange rates marked "for tomorrow".
We look in the terminal or on sites with online broadcasting of charts, where the current rate is displayed now, and open deals in the direction of the rates set by the Central Bank. This description is not a trading system, but it is worth observing the "realizability".
What affects the ruble exchange rate?
How does the Russian Central Bank influence the ruble exchange rate? Figuratively speaking, the exchange rate is smoothly regulated when necessary. Namely, one of the objectives of the Bank of Russia is to ensure stability of the national currency. At the same time, the Bank implements exchange rate policy within the framework of the managed floating exchange rate regime. The policy is quite interesting: on the one hand, the Bank of Russia does not prevent the formation of trends in the dynamics of the ruble exchange rateOn the other hand, there is a number of factors that are determined by the action of fundamental macroeconomic factors, smoothes sharp fluctuations in the exchange rate. It looks like totalitarianism, but let's remember not so long ago the past currency interventions of the Swiss Bank, which tightly pegged the euro to 1.20 francs, or the interventions conducted by the Bank of Japan. By the way, you can see the earlier interventions of the Central Bank of the Russian Federation here.
The monetary policy pursued by the Central Bank of the Russian Federation is reflected in the amount of interest rate. It currently stands at 8.25%. On bank website you can see the history of rate changes. As a rule, a decrease in interest rate puts pressure on the currency.
The domestic currency market is influenced by events and news from Europe. Greece alone has made traders cling to their monitors to track the movement of the euro, and it does not matter what currency - the dollar or the ruble.
Rising oil prices and existing foreign capital inflows lead to a significant demand for the Russian currency, as a result, the Bank of Russia is only trying to smooth out excessive volatility.
There is another unofficial fundamental indicator: for example, if the news is negative, it will have little impact on the market, while if it is positive, in this case there are much more chances to raise interest in the national currency. This conclusion is rather subjective, as it is made on the basis of traders' reactions on various forums and in various social networks when discussing any news affecting the ruble. It is possible that this is a peculiarity of the existing mentality, in the conditions of which the ruble is always considered to be in a position of uncertainty.
What can the ratings of specialized agencies (Moodys, Fitch, S&P) suggest? An excellent infographic is made by the RIA Novosti agency, according to which you can see the ranking breakdown by country.
In general, the EUR/USD currency pair is much stronger in the minds of traders, but the tendency to introduce USD/RUR into trading is gaining momentum. Popularization of the instrument depends on brokers. Already today we see brokers moving towards improving trading conditions for traders. Agree that having rubles in your wallet and tracking the USD/RUR rate, you feel more protected from predictable crises. Good luck to all traders!