USD/RUB looks to consolidate after gyrating in a large boundary, Russia-Ukraine peace talks eyed

The USD/RUB pair tapped a high of 155.00 on Monday but eased off quickly towards 123.00 on rising uncertainty over the future of the Russian economy. A visible wide swing in the major is likely to bring a lackluster performance, which may be followed by a resumption in the rally.

The ban on Russia on the SWIFT international banking system, prohibition of Russian oil by the US, and cease of Russian assets by the West have left dried leaves on the financial structure of the former's economy. The oil-rich country without a buyer may fail to address its fiscal revenues going forward. In response to the ban of Russian oil at the US ports, Moscow leader Vladimir Putin has promised a retaliation, which may bring quick sanctions from its allies.

The oil prices have climbed above $125.00 on large deviation in the demand-supply mechanism led by the isolation of leading oil producers in the world.

Meanwhile, Ukrainian President Volodymyr Zelenskyy has confirmed that he is no longer pressing for NATO membership by Ukraine. The confirmation by the former is certainly an indication of a ceasefire, which may pause the destruction and death in Ukraine. However, the Kremlin may resort to operating in isolation post the ceasefire confirmation between the nations.

Adding to that, the Ukrainian leader Volodymyr Zelenskyy is ready to settle on recognition of pro-Russian territories as ‘independent’.

The US dollar index (DXY) is holding itself above 99.00 on rising odds of a 50 basis point (bps) interest rate hike by the Federal Reserve (Fed) in March’s monetary policy meeting. However, investors will also focus on the pre-mega event of US inflation numbers, which are due on Thursday.