Societe Generale: sell the euro and buy Russian ruble
Ruble demonstrates high volatility on Friday, May 22. The day before, the Russian currency fell to 70.60 against the US dollar, which is the lowest value since March 11. However, this afternoon the dollar/ruble pair soared above 72.00, but then fell below this round mark. Euro/ruble fell on Thursday to 77.45, but rose to 78.30 on Friday.
Currency strategists of French bank Societe Generale recommended to sell a single currency against the ruble, as well as the South African rand, forming a generally positive outlook on the prospects for the currencies of developing countries.
EM currencies are strengthening for several days, some EM countries are able to continue the tactical rally as the world economy recovers, affected by the pandemic.
Investors are already reducing the volume of short positions in the ruble and South African currency, but so far the volume of shorts remains high.