Forex market traders use macroeconomic indicators in their work, that is, indicators of the state of the economy displayed in the economic calendar. And the state of the economy of any country directly affects the exchange rate of the national currency. The most important macroeconomic indicator is gross domestic product (GDP). Why is GDP indicator important to a trader? The size of the economy has an impact on the production, consumption and import of goods. Understanding which countries lead in terms of GDP plays a key role in fundamental analysis. The fate of the economies of the top 10 countries will certainly be reflected at the global level.

Not all currencies on this list are used for international payments. For example, China's GDP growth does not always impact the RMB due to low international circulation. However, China's GDP decline could impact other currencies including the Australian dollar, New Zealand dollar, US dollar and euro. For a trader, the dynamics of GDP is more important than its size. The active development of the economy strengthens its currency. It is also important that actual growth matches expectations.

An unexpected change in GDP can cause significant movements in the exchange rate. The larger the economy, the more the market reacts to the slightest deviations. For example, a slight overshoot in US GDP growth could strengthen the dollar.

With the Russian economy, it would take a significant beating of expectations to influence the exchange rate. GDP, as well as rates, inflation and unemployment, affect the exchange rate of the national currency.

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As globalization has increased dramatically in recent decades, businesses are increasingly dealing with suppliers and customers around the world. As a result, the foreign exchange market has also become more open, exposing companies to receivables and so-called “exotic currency” risks. We will look at what exotic currencies are, what risks exist when trading such currency pairs and what currency to buy in 2024.

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In 2024, the ruble and yuan may undergo significant changes. A Bank of Russia report showed the yuan's share of currency turnover on the Moscow Exchange at 46% in November 2023, while the share of the dollar and euro fell to 52%. Russian companies are issuing bonds in yuan, and banks are expanding the supply of yuan deposits. Therefore, it is important what the share of the Chinese currency is in trade between Russia and other countries of the world, as well as its resistance to inflation and possible areas of investment for Russian investors.

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The Russian currency will face difficult challenges in the coming months. The end of the Central Bank's tight monetary policy, a decline in monetary exports and a possible change in Russia's political priorities after the presidential elections could be potential factors putting pressure on the Russian currency. The Bank of Russia's forecast for a reduction in the country's trade balance and current account indicates expectations of expanding sanctions or tightening measures to comply with existing restrictions.

The Russian government continues to maintain strict control over foreign exchange turnover. Russia's largest exporters are required to sell almost all foreign currency received, a measure planned to remain in place until the end of April. In addition, this year the Russian Central Bank resumed foreign currency sales as part of the fiscal rule and NWF investments, but this could not prevent the recent weakening of the ruble against the dollar. The forecast for the euro exchange rate against the ruble in 2024 directly depends on the main currency pair.

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The exchange rate of the Russian ruble against the dollar has stabilized, and in February 2024 it will consolidate around the level of 90 rubles per unit of American currency. This became possible as a result of the fact that the Russian economy reached equilibrium in the levels of imports and exports. Stabilizing the exchange rate is important for exporters, investments and the consumer market.

Based on the results of 2023, it becomes clear that the Russian economy is coping with the negative impact of economic sanctions. The country’s export potential has been preserved, which was facilitated by effective interaction with friendly countries and the prompt development of new approaches to supporting national producers. No one can say for sure what will happen to the ruble in 2024, but volatility is decreasing.

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