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 supported at 1.1200 ahead of Eurozone data

EUR/USD managed to retain the 1.12 handle amid broad-based US dollar bullish consolidation, as markets seem to have scaled back expectations of Fed rate cuts. Focus on Eurozone final CPI data.


GBP/USD attempts a bounce again above 1.2400, UK CPI eyed

The latest leg down in the GBP/USD pair found buyers near 1.2380 region, with the rates now attempting another recovery above the 1.24 handle heading into the key UK CPI data release. 


USD/JPY consolidates in a range, comfortably above 108.00 handle

Reviving safe-haven demand underpins JPY and exerts some pressure. Renewed weakness in the US bond yields further weighed on the USD. The downside remains limited amid tempered Fed rate cut expectations.


Gold clings to 21-DMA amid less active markets

Gold carries the 3-week old lower high formation forward as it clings to 21-day moving average (DMA) during Wednesday’s less active market hours ahead of the European session. Lack of major data/news during the Asian session limits market moves.

Gold News

Forex Today: US dollar corrects, US-Japan eye a trade deal, and Bitcoin bounces

US dollar reverses a part of Tuesday’s US retail sales data-led rally. US-Japan are working towards a trade deal by September. Bitcoin recovers, but remains below the 10k mark.

Read more