GBP/RUB Outlook: The outlook for GBP/RUB is likely to move sideways, trading near its recent average and lacking a clear driver in the current environment.
Key drivers:
• Rate gap: The Bank of England's cautious stance on rate cuts contrasts with the Bank of Russia's tight monetary policy, creating instability in the exchange rate.
• Risk/commodities: Oil prices are currently elevated, exceeding their average, which typically supports the ruble due to its strong correlation with energy revenues.
• One macro factor: The UK's projected GDP growth slowdown may weigh on the pound, as stagnant household incomes hinder economic progress.
Range: GBP/RUB is expected to remain stable within its recent 3-month range, not testing extremes significantly in either direction.
What could change it:
• Upside risk: A shift in the Bank of England's monetary policy, signalling potential rate hikes, could boost the pound against the ruble.
• Downside risk: Increased geopolitical tensions or further sanctions on Russia leading to greater economic strain could pressure the ruble downward.
