EUR/RUB Outlook:
The EUR/RUB exchange rate is slightly positive but likely to move sideways, as it is currently near its recent average and mid-range without a decisive driver.
Key drivers:
• Rate gap: The European Central Bank (ECB) faces challenges with high inflation and a weaker growth outlook, while Russia maintains high interest rates to support the ruble amidst economic slowdown.
• Risk/commodities: Rising oil prices, well above average levels, tend to negatively impact the euro due to increased energy costs, affecting inflation and growth prospects.
• Macro factor: Russia's economy is nearing recession, which could further weaken the ruble and impact its exchange dynamics.
Range:
The EUR/RUB is likely to drift within the recent 3-month range, oscillating near 91.34 but potentially testing extremes if conditions shift.
What could change it:
• Upside risk: A significant de-escalation of geopolitical tensions could boost the euro’s appeal.
• Downside risk: Continued economic struggles in Russia may lead to a further weakening of the ruble.
