USD/RUB Outlook: Bearish, as the rate is below its recent average and near lows.
Key drivers:
• Rate gap: The Federal Reserve's approach to rate cuts contrasts with the Bank of Russia's strict monetary policy, creating pressure on the ruble.
• Risk/commodities: Oil prices are above average, which can support the ruble due to Russia's reliance on energy exports, but the volatility signals uncertainty.
• One macro factor: The European Union's new sanctions on Russian gas are likely to hurt the ruble by diminishing export revenue.
Range: The USD/RUB is likely to drift within its recent range as it stays close to the low end.
What could change it:
• Upside risk: A surprising increase in U.S. inflation could lead to a stronger dollar if rate cut expectations shift.
• Downside risk: Continued deterioration in geopolitical relations may weigh down the ruble further, exacerbating its current weakness.
