The Russian ruble is losing ground, while the European and American currencies continue to grow. Some financial analysts have repeatedly warned of the fall of the ruble back in March 2014 - at the end of the Sochi Winter Olympics. Other experts claimed that the Olympic Games will increase and strengthen the Russian ruble.
To date, none of the forecasts have been confirmed. But foreign currency continues to rise in price. Therefore, the question of why the euro and the dollar are growing this year is becoming increasingly relevant.
Key factors
The American currency is growing rapidly, not wanting to lag behind its main competitor - the euro. This growth is due to two factors:
- oil prices moved into a horizontal corridor (“flat”);
- the single European currency has taken a position of perpetual decline.
Oil has always occupied a key place in the fluctuation of exchange rates. This year, Iran said it could block the Strait of Hormuz. This led to a sharp increase in quotes. And although after a few days the "American" fell sharply, already on the third day the currency confidently rushed up.
The perpetual fall of the European currency contributes to an increase in the dollar. To find out the reasons for the growth of the euro and the dollar, you should pay attention to the actions of Germany. German politicians seek to bargain for more reductions in state, social, and economic spending from neighboring states. This leads to financial uncertainty - the eurozone is constantly on the verge of default, which is skillfully balanced.
In addition, this year Russia expanded the borders of the currency corridor, which is why traders began to rapidly convert Russian rubles into dollars and euros.
Crimean conflict
The Russian ruble is losing ground due to the conflict in Crimea and the increase in this area of geopolitical risks. The behavior of Russia explains why the euro and the dollar are growing against the Russian ruble.
On March 1, 2014, the Federation Council allowed the introduction of Russian troops into Ukraine. Stock markets responded with a sharp drop in the ruble against the European and American currencies.
Not so long ago, the Central Bank rate increased in Russia. The Deputy Minister of Economic Development of the Russian Federation assures that such actions are being taken by the state to curb the rapid decline of the Russian ruble. However, no one has yet commented on how such an increase will affect the country's economic growth.
What triggers the growth of the dollar and the euro?
To understand why the euro and the dollar are growing in January 2014 years, should analyze the political and economic situation in the world in 2013.
- Last year, the US experienced strong economic growth.
- Obama agreed not to send troops into Syria.
- The funds invested by Russia in the Sochi 2014 Olympics have not paid off.
- At the end of 2013, the Central Bank began to revoke licenses in large Russian banks. This led to the closure of numerous deposits in Russian rubles.
- The CBR said it would not support the ruble in 2014.
If we evaluate these factors together, we can understand why the euro and the dollar are growing, and the Russian ruble is falling.
Financial forecasts
Analysts make conflicting forecasts about the position of the Russian ruble this year. Most of them agree that its rate will depend on oil and gas prices. Now the price of oil reaches its maximum, but by the end of the year it should fall. This will certainly affect the exchange rate of the dollar, euro and Russian ruble.
But NATO and Europe continue to threaten Russia with economic sanctions. Such actions explain why the euro and the dollar are growing. 2014 is not an easy year for Russia, both economically and politically. The country is increasingly threatened with exiting the G8. And if this happens, it will be difficult for the Russian ruble to maintain its position in relation to the European and American currencies.
Who is stronger: dollar or euro?
American analysts and experts make positive forecasts for their currency, but the euro is skeptical. However, the two dominant currencies are undergoing a crisis.
The question of why the euro and the dollar are growing is inappropriate for America and the countries of Europe. Here, a decrease in the value of hard currency (freely convertible currency) is observed.
In the United States, more and more can be heard about the impending systemic crisis, although the president unveiled a new program to combat unemployment. Obama believes that this will help move important economic processes off the ground.
Greece, Portugal, economic problems in Spain and other countries of the eurozone are pulling the Euro currency to the bottom.
Alan Greenspan, the former head of the US Federal Reserve, believes the euro has no future. The politician believes that the eurozone will not be able to withstand financial blows and will soon fall apart. But such an outcome will negatively affect the American economy, because large US companies are closely connected with the European market.
In addition, there is an increase in gold prices in the world, which also leads to turmoil in the dollar / euro pair.