USD/RUB Outlook:
The USD/RUB is slightly weaker, but likely to move sideways, currently trading below its 90-day average and near its recent lows. The lack of clear driving factors indicates limited volatility in the near term.
Key drivers:
• Rate gap: The divergence in monetary policy between the Federal Reserve and the Central Bank of Russia is creating pressure on the ruble as the Fed's rate decisions strengthen the USD.
• Risk/commodities: Oil prices are significantly above their recent average, which typically supports the ruble; however, current low oil prices may cause caution.
• One macro factor: Recent geopolitical tensions are boosting demand for safe-haven assets like the USD, putting additional pressure on the ruble.
Range:
The USD/RUB is expected to drift within the current three-month range, as recent highs and lows seem less likely to be tested soon.
What could change it:
• Upside risk: Any unexpected improvement in geopolitical conditions could strengthen the ruble.
• Downside risk: Continued strength in the US dollar driven by robust economic data could further weaken the ruble.
