Dollar exchange rate forecast for 2023

The American dollar (USD) is one of the most liquid currencies in the world. It is included in most major pairs (“majors”). At the same time, it is characterized by high volatility and a narrow corridor. This makes it possible to earn money at different time distances.

Predictable dollar

During the Biden presidency, the US dollar has become calmer in world markets. The exchange rate takes into account the fact that the President of the United States has focused on domestic issues and began to participate in constructive trade negotiations. This had a positive impact on the markets. Tensions have eased. Interest in USD as a safe haven currency has fallen.

Joe Biden has begun a large-scale process of stimulating the US economy. The goal is to restore it after the coronavirus pandemic. This step resulted in a budget deficit.

The head of the US Federal Reserve System said: until the end of 2023, the interest rate will not be increased. This had a positive impact on the dollar exchange rate for 2023.

Another positive factor for the US national currency is the success of China, South Korea and Taiwan in overcoming the consequences of the covid pandemic. The economies of all these countries began to grow again. This aroused investor interest in risky markets and affected the dollar exchange rate in subsequent months: making it less predictable.

Some investors investing in risky markets are withdrawing capital from the dollar. This reduces the value of this currency on the world market.

Technical analysis has shown that in the coming months the dollar/euro exchange rate will fall (the dollar will strengthen). This is good news for investors who prefer long trades and investments for the long term.

Dollar exchange rate forecast for 2023

November continues with a downward trend in the middle distance. Although the USD price tested the resistance level at the end of October, it was not possible to overcome it and continue to grow. The fall continued. If the price drops below $1.05–1.04, the target zone will be $1.03–1.02 per €1.

If quotes overcome the 1.07 level this week, this can be regarded as a signal to sell. It is quite possible that a reversal will occur: when the dollar rises, there will be a pullback due to external factors. These are good opportunities to enter the market and quickly make a profit.

According to moving average analysis, in the next 3 months the average price of the dollar will drop to 1.17. This is indicated by the position of the moving MACD. It is above the price level.

It is difficult to predict what the dollar exchange rate will be tomorrow. It is easier to predict his behavior over a longer distance.

In November, analysts predict the USD to move in the range of 1.17–1.22. In December, the US dollar will move to the level of 1.19–1.24. In January it will roll back to its previously occupied positions.

Technical analysis showed that the maximum increase in the euro/dollar exchange rate will occur in April and May 2024. The corridors are 1.24–1.30 and 1.27–1.31, respectively.

Dollar forecast for 2023. What financial organizations and institutions say

According to Bloomberg, in the fourth quarter of 2023, the dollar will become cheaper relative to the euro to the level of 1.18. This is the rating agency’s most positive forecast.

Morgan Stanley notes that investors are showing increased interest in instruments sold for the US dollar. They have high profitability. They are backed by capital with deep liquidity in the American economy. Therefore, the conglomerate expects the USD to strengthen by the beginning of 2024.

The sluggish growth of the American national currency and the desire of investors to reduce economic risks are increasing the demand for carry trade and so-called safe haven assets. Morgan Stanley expects that by the beginning of 2024, the EUR-USD pair rate will drop to 1.15.

Bank of America, on the contrary, hopes for the strengthening of the eurozone national currency by the beginning of next year. His forecast for the dollar exchange rate at the end of 2023 is a fall to 1.10. The US currency will supposedly rise to 1.15 only by the beginning of 2025.

Deutsche Bank believes that the dollar will fall throughout 2024 and 2025. By the end of 2023 it will be trading at 1.15. Then it will reach the 1.20 mark.

Some investors reason like this: the forecasts are influenced by the slowdown in inflation in the United States. It decreased by 0.9% to 3.1%. This means that the Fed has come even closer to the 2% target. The likelihood of new rate increases before 2024 is minimized. This state of affairs may put pressure on the dollar. It will be at around 1.11.

Forecast of the dollar to ruble exchange rate for 2023

At the beginning of autumn, the head of the Ministry of Energy claimed that by December 2023 the dollar would drop to ₽94. The average value of the US currency in 2023 would allegedly be ₽85.2. Next year it will trade at ₽5 more. By 2025, average quotes will be at ₽ 91.

All this is justified by economic factors. Export volumes fell by almost a quarter compared to 2022. Over the next couple of years, the trend will continue. No growth to previous positions is expected.

In 2024, it is planned that exports will reach $471 billion. Purchases abroad will also go up. The current balance will fall to 68.5% (that is, to $74.4 billion). In 2024, 2025 and 2026 it will be slightly higher – at $80 billion.

Mishust in stated: in 2024, expenses will exceed income by ₽ 1.1 trillion. These figures are higher than those planned for the period from 2022 to 2024.

Dollar to ruble exchange rate – monthly forecast

At the end of October, the Central Bank of the Russian Federation raised interest rates for the fourth time this year. And immediately by 200 bp. – up to 15% from 13%. The ruble on the stock exchange immediately reacted with a sharp increase to ₽ 93 per dollar. The euro dropped to ₽98 for the first time since July.

The key rate for 2023 has almost doubled. The latest increase was 2 times higher than the consensus forecast. The growth was expected to be only 100 bp.

In October, the ruble strengthened its position. The rate hike added pressure on the dollar. In addition, a significant part of taxes is paid in October – from ₽ 1.4 trillion. up to ₽ 2.2 trillion. Most of them are AIT levied on oil and gas companies, which are required to pay taxes every quarter.

But this is not the main factor influencing the value of the dollar in the Russian Federation. The mandatory sale of foreign currency earnings had a much greater effect.

Russian exporters are required to supply 80% of foreign currency to Russian banks within 6 months. Then sell at least 90% domestically. It is expected that in November and December currencies will be sold for $12–14 billion. The ruble will strengthen its position even more.

Some experts say that weak sales of foreign exchange earnings in previous months are the main reason for the strengthening of the dollar. In their opinion, in the near future only forced sales will affect the value of the currency in the country.

Experts say a number of other factors will influence whether the dollar will rise in November. In particular, the October tax period will no longer be able to support the ruble. Exporters will slow down sales. Importers, on the contrary, will come to the market to buy dollars at a favorable rate to pay for pre-holiday imports.

The recovery of the Chinese economy can be considered a strengthening factor for the Russian ruble. Will the dollar rise due to rising hydrocarbon prices? Unlikely. The geopolitical crisis in the Middle East is already pushing prices up. The ruble only benefits from this. After the Hamas attack on Israel, Brent rose in price by $5–10.

The trade surplus also affects the ruble. Along with it is the volume of capital outflow. An increase in the key rate may lead to a reduction in demand for imports. Outflow may also slow down. Both will only strengthen the national currency of the Russian Federation.

A negative factor for the price of the dollar in the Russian Federation is the acceleration of inflation to 8% by the end of the year. Another thing is an increase in budget expenditures. They can lead to an increase in the money supply used to purchase imports.

The real forecast for the ruble/dollar exchange rate may change if the Russian government takes additional measures to stabilize it. This:

• combating capital outflow;
• prohibition of paying debts and dividends abroad, lending to foreign trading companies;
• restrictions on the withdrawal of rubles to other countries;
• increasing the key rate to 20%;
• increasing sales of the yuan;
• a ban on Russian companies buying shares from non-residents;
• measures to retain foreign companies and slow down their exit.

In general, the ruble can expect very strict financial regulation. Therefore, next year it may become stronger. But no one will mess with him, and it will be very difficult to buy and spend a dollar.

Is it possible to soften the course?

If the Russian government does not take new measures to stabilize the exchange rate and stops forcing the conversion of foreign currency earnings into rubles, the price of the dollar could very likely reach ₽120 or even ₽130.