Economic recovery in Russia and fading political risks have supported the ruble since April. Economists at Danske Bank expect RUB to edge moderately higher, especially against the EUR, targeting EUR/RUB at 81 in 12 months. The key risk to RUB crosses remains political in nature.
Fading tail risks and economic recovery supports the Russian ruble
“In line with broad Europe, growth in the Russian services sector has continued to accelerate and the Google Mobility indicator reached pre-covid levels in late May. This is well in line with the central bank’s expectation of economic activity having reached pre-pandemic level as of today (Q2). As the recovery is ongoing, the central bank is hawkish and political risks are fading, RUB may see further support from here.”
“From an FX perspective, we continue to see the political situation between Russia and the West as a looming tail risk. Over the past years, Russia has tended to move from skirmish to skirmish, and the recent incident of Russia allegedly firing warning shots towards a UK warship near Crimea acts as a reminder of Russia’s strategy of maintaining constant pressure in the area.”
“Lockdowns, rising inflation, politics and low oil prices were headwinds for the Ruble in 2020 but these factors have turned supportive for stronger RUB. Global risk sentiment has also been supportive, and we expect this to continue going forward.”
“We expect both USD/RUB and EUR/RUB to edge moderately lower, targeting EUR/RUB at 81 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.