USD/RUB Outlook: Bearish, as the rate is below its recent average and near recent lows, pressured by specific current factors.
Key drivers:
• Rate gap: The divergence in monetary policy between the Federal Reserve, which is cutting rates, and the Bank of Russia, which is signaling future rate cuts, is widening the rate gap against the ruble.
• Risk/commodities: Oil prices are significantly above average, which typically supports the ruble; however, the current geopolitical tensions may overshadow this effect.
• One macro factor: Ongoing uncertainties around U.S. fiscal policy and potential for government shutdown are driving down the demand for the USD.
Range: The USD/RUB is likely to drift lower within its recent 3-month range as bearish pressures prevail.
What could change it:
• Upside risk: Any positive resolution to geopolitical tensions or surprising strength in U.S. economic data could bolster the dollar.
• Downside risk: Further escalations in sanctions against Russia or negative U.S. job data could lead to additional weakening of the dollar.
