Weekly Forex Review (04/17/2023-04/21/2023)

The tenge exchange rate weakened to 457.7 tenge per dollar last week. The dynamics of the exchange rate are mainly due to external economic factors, while the exchange rate trajectory coincides with our outlooks. 

The main factor of the weakening was the strengthening of the US currency. The Dollar Index rose by 0.2 points. Market participants expect a further increase in the key rate of the US Federal Reserve, the presidents of the St. Louis and Atlanta Federal Reserve Banks made "hawkish" statements, pointing to the need to raise the key rate. At the same time, the largest US banks reported high revenues, which contradicts expectations about the economy slipping into recession and supports the idea of raising the key rate. 

Statistics on inflation in Europe and the UK also indicate the need to raise the key rate. Concerns about another rise in interest rates are increasing uncertainty about energy demand even despite the recovery in consumption from China. Thus, the oil price decreased by 5.4% for the week.

The ruble showed strengthening against the dollar during the week. This is characterized by the activation of exporters on the eve of the tax week. At the same time, the ruble weakened and lost all weekly strengthening due to oil prices drop by the end of the week.