Weekly Forex Review (04/03/2023-04/07/2023)

Last week, the national currency strengthened to 445 tenge per dollar. The oil price increases and the weakening of the Dollar Index as favourable external backgrounds restored optimism among market participants. 

The OPEC+ member countries agreed to reduce oil production by 1.16 million barrels per day by the summer, which was the impetus for an increase in oil prices. The price per barrel of oil on Monday (04/03) immediately increased by $ 5 and closed at $ 85 per barrel. The price increase was also affected by data on the reduction of commercial oil reserves and drilling rigs in the United States. 

The Dollar Index fell below 102 points at the beginning of the week, and it recovered to 102.09 at the end of the week. The reason for this volatility was the "mixed" statistics on the labour market in the United States. Data on the number of open vacancies and Americans applying for benefits turned out to be worse than economists' expectations and increased concerns about the beginning of repression. A strong Employment Report in the United States was released by the end of the week. 236 thousand jobs were open, and the unemployment rate decreased from 3.6% to 3.5%.

The RUBUSD exchange rate is declining despite high oil prices. The ruble is affected by the limited supply of foreign currency on the market due to the sale of Russian assets by foreign companies. 

The dynamics of tenge this week will depend on external economic factors. Data on inflation in the US in March will be released this week, which will influence the Fed's decision on the key rate.