Analysts estimated the impact of the parliamentary elections in Britain on the ruble

© RIA Novosti / Alex Monotonicity in photobackpack guarding a polling station in LondonAnalysts estimated the impact of the parliamentary elections in Britain on the ruble© RIA Novosti / Alex Monotonicity the image Bank

The ruble will strengthen against the pound sterling with the victory of the labour party on today’s parliamentary election in the UK will remain approximately at the current level with the victory of the conservatives, according to respondents RIA Novosti analysts.

To 14.50 GMT, the British pound calculations «tomorrow» has decreased by 25 cents, to is 73.72 of the ruble, the dollar — 11 cents, to 56,97 ruble, Euro — by 35 cents, to 63,99 of the ruble, follows from the data of the Moscow exchange.

Extraordinary elections to the Parliament of great Britain held on Thursday, June 8 at the initiative of the conservative government. After citizens voted in a referendum for a British exit from the European Union, Prime Minister Theresa may decided that for the upcoming meetings in Brussels the need for unity in political London.

The main intrigue of the election is whether the ruling Conservative party to reinforce the position in the Parliament or at least keep the absolute majority (326 seats), which allows it to unilaterally form a Cabinet of Ministers.

The voting will last until 22.00 local time (00.00 GMT). Immediately after this will be published data of exit polls and counted votes, which will last all night. Final data on the outcome of the vote will be announced on Friday, June 9. According to the results of the elections will determine the composition of the Cabinet of Ministers will be formed by the house of Commons of the Parliament.

Controversial elections

In the opinion of Bogdan Zvarich Ledger «Finam», the parliamentary elections in the UK will not have a major impact on the dynamics of the pound against major world currencies. «The fact is that, most likely will win in the elections the ruling party that is already incorporated in the price. As a result, investors are calm enough to react on their results,» he says.

Although survey data show that is likely to win the ruling party, last year’s experience says that it is not excluded unexpected option that could significantly affect the markets, traders said. «Parliamentary elections in great Britain are perhaps the most controversial in the last ten years», says Daniil Egorov from Dukascopy Bank SA.

«(The leader of the opposition labour party of great Britain Jeremy — ed.), Corbin proposes to raise taxes and nationalize some of the companies that is unpopular thesis for the population of the United Kingdom, but very attractive things for investors, as it removes a lot of issues on withdrawal from the European Union», — he said.

«For business with the nationalization of removed mass of legal conflicts concerning the work of British companies in a new jurisdiction, and raising taxes on making more than 80 thousand pounds a year to help cope with 60 billion in payments to the EU related to the exit from the EU, as well as the increased load on the health care system», — says Egorov.

The experience of last year shows that the market reaction to political events can be quite unexpected, said Vladimir Bragin UK «Alfa-Capital». Suffice it to recall the outcome of the US elections, after which, contrary to consensus expectations, the stock market began to rise as Treasury yields, he says.

«In the case of Britain, any predictions on the reaction of the foreign exchange market on the outcome of the election will have very low reliability. The results of the election could affect the pound through a change in the expectations of how they will affect the process of «divorce» with the EU,» says Bragin.

«The worst part is the lack of a majority from any party, no matter what. In this case, the degree of uncertainty increases, as does the ability of Britain to sustain a coherent bargaining position. Roughly speaking, the EU will be easier to push is not the best for British conditions,» he says.

All other outcomes for the pound will be rather neutral, he said. Even if the party Theresa may will lose the majority, and its opponents will take the Parliament, the position of Britain in terms of output, maybe that will change, but will remain solid, says Bragin.

The growth of the ruble is possible

If the party will win Corbin, the pound in the short term, waiting for a pretty significant drop against major world currencies, said Egorov. In the short term, in this case, we expect the lowering of the British pound against the ruble and the dollar, said Natalia Milchakova from Alpari.

«The fact is that if the Conservative party Theresa may gets the majority, then this news will be more than expected and priced in by the market. But if the election ends with a victory of the labour party, over the market hangs the uncertainty of the future Brexit and perhaps a referendum in Scotland that will inevitably come to a weakening of the pound against the dollar and Euro,» she explains.

In the short term, with the victory of the conservatives, the pound against the ruble will remain in the range of 72 to 74 rubles per pound, with the victory of the labour party could fall to 69-70 of the ruble, said Egorov.

«The pound to Euro in case of victory of the conservatives, we tend to assess in the framework of 1.10 to 1.18, in case of victory of the labour – 1,0–1,05. Against the dollar, the behavior of the pound may be more controversial: the British currency may fall to $ 1.2 per pound in case of victory of the party Corbin. In case of victory of the conservatives is likely to remain at the level of 1.35,» he predicts.

In the Euro/ruble is expected to strengthen the single European currency, after the results of parliamentary elections in the UK is the problem of pound, but not the Euro, indicates Milchakova, «our expectations: pound/dollar in the short term protorguetsya in the range of 1.29-1,295, the dollar/ruble — 56,5-58, Euro/ruble — 63-65».

In the opinion of Alexei Blue from the company «VTB Capital», the pound against the dollar will fall, if there are similar results for the conservatives and labour, and the ruble to the dollar may fall a little due to the increasing volatility of the risky asset in General.

For the ruble is more important than oil

Analysts estimated the impact of the parliamentary elections in Britain on the ruble© AP Photo / Hasan JamaliНефть going up by data on the decline in USA in General, with regard to the dynamics of the pound against the rouble, the key factor continues to be the situation on the energy market, said Zvarych. «In this situation, we expect the correctional growth of oil prices, which will contribute to the strengthening of the ruble against the British currency,» the analyst says.

For a couple dollar/ruble results of the parliamentary elections in the UK in General will have no impact, as there «rights» in the first place, the price of oil, according to Milchakova.

But in any case, even if Brexit will go on the planned scenario, the ball will still be on the side of the European Union, so the British pound while it is better to stay away, preferring other currencies, she advises.

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