The recent performance of the USD to RUB exchange rate has been influenced by a combination of economic indicators and geopolitical developments. Analysts have noted a sharp decline in the US dollar (USD) following a disappointing payroll report, which revealed only 22,000 jobs added in August. This outcome has intensified expectations for the Federal Reserve to ease monetary policy, with at least 75 basis points of cuts anticipated by the end of the year. As a result, the USD is facing increased selling pressure, putting it at risk for further losses.
Key market developments for the USD include ongoing leadership transitions within the Federal Reserve and the approaching release of inflation data. Potential alterations in U.S. monetary policy could hinge on this CPI report, expected to show a core price rise of 0.3%. Meanwhile, growing trade tensions with China and global dedollarization efforts are also weighing on investor sentiment.
On the Russian side, recent measures taken by the Finance Ministry to raise daily foreign currency sales could have significant repercussions for the ruble (RUB). This strategy, aimed at stabilizing the currency, comes as inflation data shows a decrease, with consumer price inflation falling to 8.79% in July. However, concerns surrounding potential recession risks are also present, with Sberbank's CEO indicating that high-interest rates might prolong economic stagnation.
In addition, a Reuters poll suggests that the RUB may weaken by around 20% over the next year, potentially reaching 100 RUB per USD due to expectations of new U.S. sanctions. This sentiment reflects a broader caution in the market, as the RUB is currently trading near 90-day highs at approximately 83.71, which is significantly above its 3-month average of 79.54. The ruble's volatility is evident, having oscillated between 75.31 and 83.71 during this period.
Finally, movements in oil prices also have implications for the RUB, which is closely tied to this benchmark. Current oil prices stand at $66.39, representing a decline of 3.8% from their 3-month average, and illustrate ongoing volatility in the oil market amidst geopolitical developments. Overall, the outlook for the USD to RUB exchange rate remains cautious, with potential for further currency fluctuations driven by both domestic policies and global economic pressures.
