USD/RUB Outlook:
The USD/RUB rate is slightly positive, likely to move sideways, trading just above its 90-day average and near recent highs. The robust demand for the USD stems from heightened geopolitical tensions.
Key drivers:
• Rate gap: The U.S. Federal Reserve's interest rate policy contrasts with the Russian Central Bank's high rates aimed at supporting the ruble, affecting their currencies.
• Risk/commodities: Oil prices are significantly above average, increasing global demand for USD, as most oil is priced in dollars.
• One macro factor: Russia's economy is showing signs of slowing down, potentially leading to declines in the ruble due to reduced revenues from oil and gas.
Range:
The USD/RUB is likely to test the higher end of its recent volatile range.
What could change it:
• Upside risk: Further escalation in the Middle East conflict could boost USD demand.
• Downside risk: A sustained drop in oil prices might weigh on the ruble.
