USD/RUB Outlook: Bearish, reflecting the rate's position below the 90-day average and near recent lows.
Key drivers:
- Rate gap: The Federal Reserve's expected rate cuts could weaken the USD against the RUB as interest rate differentials shift.
- Risk/commodities: The rising oil price supports the RUB, as Russia's economy relies heavily on energy exports and higher prices boost revenue.
- One macro factor: The Bank of Russia's tight monetary policy aims to control inflation, maintaining pressure on the RUB.
Range: The USD/RUB is likely to drift lower within the recent range, struggling to regain strength.
What could change it:
- Upside risk: A stronger-than-expected U.S. non-farm payrolls report could increase Fed rate hike bets, supporting the USD.
- Downside risk: Continued geopolitical tensions or sanctions could further weaken the RUB if energy export revenues decline.