EUR/RUB: Sanction risks set to continue to weigh on rouble – Danske Bank

The tensions in the Donbass area near the border of Ukraine and Russia represent a new tail risk for the RUB. As such, USD/RUB has moved higher. The latest US sanctions will have limited economic impact on Russia but the risks of even tougher sanctions will continue to weigh on RUB, economists at Danske bank appraise.

See: USD/RUB risks a visit to the 72.65/54 area while below April high at 78.04 – Commerzbank

Risks related to the Ukrainian situation remain high

“Rapid escalation still seems unlikely, as in reality, Russia has little to gain by attempting invasion of Ukrainian territory. The Kremlin has mentioned domestic security as a reason for strengthening the military presence in the area, but the economic damage caused by possible new sanctions would outweigh any possible gains Russia could achieve in Eastern Ukraine.”

“The Biden administration seems to take a harsher approach on Russia than Trump did. Latest US sanctions block US institutions from investing into newly issued Russian sovereign debt, but the economic and market consequences may not be too big as the financing needs of Russia are limited going forward. However, the risk of further escalation in the Donbass area and US criticism of the treatment of Navalny will keep risks of new sanctions alive.”

“Despite our generally bullish view on RUB given the strong economic fundamentals, Kremlin’s strategy of maintaining constant pressure on Ukraine (and the west) seems to lead Russia from one conflict to another, meaning the sanctions discount in the RUB is here to stay. As such, we revised our EUR/RUB forecast higher to 89 in 1-3M, 84 in 6M and 83 in 12M.” 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD battles with 1.1700 as the market mood turns sour

Poor German data and renewed concerns about a default of the Chinese Evergrande property giant undermined investors’ sentiment, pushing them into the dollar’s safety.


GBP/USD accelerates its slump, trades around 1.3650

GBP/USD is under strong selling pressure, trimming most of its post-BOE gains. Concerns about the global financial health and slow moves towards tapering weigh on markets.


XAU/USD hangs near multi-week lows, around $1,745 ahead of Powell

Gold struggled to capitalize on its attempted intraday recovery move. Hawkish Fed/BoE, rising bond yields acted as a headwind for the metal. Resurgent USD demand exerted additional pressure on the commodity.

Gold News

PBoC imposes ban on crypto trading as it fosters ‘illegal financial activity’

PBoC bans crypto trading activities and a plethora of associated services, labeling it “illegal.” Overseas cryptocurrency exchanges providing services to Chinese residents will be investigated in accordance with the law. 

Read more

Evergrande, VIX and yields make for choppy day ahead

Equity markets remain focused on Evergrande as rumours of a possible default on overseas debt swirl. The market appears to be on the hunt for negative news, which leads us to conclude that stocks are going lower in the short term.

Read more