According to the Research Team at Nordea Markets, the Russian ruble has been performing quite well since the beginning of the year but they warn that volatility is likely to return as sanctions risks come back in focus.

Key Quotes: 

“The RUB was enjoying, to the fullest, the general EM recovery fuelled by a softer Fed and hopes around a potential US-China deal. The oil price settled above the psychologically important USD 60/bbl threshold, which provided additional support. The sovereign rating upgrade from Moody's to investment level was another reason behind the strong appetite for Russian assets. As a result, by mid-February, the RUB appreciated by 5.8%, thereby showing the best performance among EM currencies.”

“With limited sanctions talk since autumn 2018 (except positive news on Rusal delisting from the SDN list), the market started to forget about sanctions. The country risk premium, as measured by CDS, has narrowed to just 130 points (lower than before the August sanctions wave). Foreign investors came back aggressively, buying record amounts of RUB-denominated bonds and stocks. RUB volatility briefly decreased below that of the EM average, touching the lowest level since the April sanctions episode. The RUB appreciated all the way to the robust support level of 65.5 vs the USD, and was about to test it, but a new wave of sanctions threats spoiled the party.”

“As a new sanctions bill is being pushed forward through the US Congress, news flow on the subject will intensify in the coming months. Even though there is still a long way to go before new waves of sanctions are implemented (if implemented at all), this topic will again become the focus of the market, promising more pressure on the RUB and more volatility. As the market is warned that sanctions risks are not off the table, the levels around 65.5 vs the USD and 74 vs the EUR should remain the limit for RUB appreciation.”

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD falls to two-week lows as trade wars escalate, strong US data

EUR/USD is hovering above 1.1150, the lowest in two weeks as Chinese media reported that the country is no longer interested in talks with the US after the latter blacklisted Huawei. US Consumer Sentiment beat with 102.4.


GBP/USD hits lowest since January as cross-party Brexit talks collapse

GBP/USD hits the lowest levels since January, below 1.2750. The UK's Labour Party said there is no point in talking with a government about to collapse. UK PM May is set to step down in June.


USD/JPY fails again to break 110.00, turns flat for the day and the week

The USD/JPY pair found support around the 109.50 area and bounced to the upside, erasing losses.


Gold breaks to the downside hits 2-week lows near $1275

Gold prices accelerated to the downside today and particularly after the beginning of the American session, resuming the bearish move. The yellow metal is falling for the fourth day in-a-row and it is down almost $30 from the weekly high. 

Gold News

Bitcoin price update: BTC reclaims $7,000, recovery stalled

Bitcoin (BTC) has recovered from a scary flash crash that took it all the way down from $7,800 to as low as $6,512. The first digital coin lost about 16% of its value in a matter of hour with no particular reason .

Read more