USD/RUB loses around 97.70 amid Russia’s voluntary oil cuts, US economic data eyed

USD/RUB loses ground below the 98.00 mark during the early European session on Wednesday. The pair currently trades around 97.70, up 0.79% on the day.

Russian central bank deputy governor Alexei Zabotkin said on Tuesday that Russia's economic growth this year will be towards the top end of the 1.5%-2.5% expected range, per Reuters. Furthermore, Russia’s Finance Minister Anton Siluanov forecasted last week that the Russian economy will expand by at least 2.5% in 2023, with inflation hovering around 6%. He also said that he will collaborate with the Central Bank to take all necessary steps to bring down inflation to a sustainable level.

Apart from this, the Russian Ruble gains ground on Wednesday due to a rally in oil prices after the country extends its voluntary oil supply cuts. That said, Saudi Arabia and Russia, the world’s major oil exporters stated that they will extend oil production cuts for the rest of 2023. Russia's Deputy Prime Minister Alexander Novak said on Tuesday that the nation would reduce its exports by 300,000 barrels per day through the end of 2023.

However, the upside of RUB seems limited as the country has increased its military spending objective for 2023 to more than $100 billion, representing a third of all state expenditure, as the escalating costs of the Ukraine conflict place an increasing strain on Moscow's finances. This, in turn, might act as a tailwind for the USD/RUB pair.

On the US Dollar front, market participants speculate a 25 basis point (bps) rate increase from the Federal Reserve (Fed) for the entire year, bringing rates to 5.75%, according to the World Interest Rates Probabilities (WIRP) tool. Fed Governor Christopher Waller stated that the Fed has further room to increase interest rates, but the data will determine whether the Fed needs to hike rates again and if it is done hiking rates.

Moving on, market participants will focus on the US ISM Services PMI data due on Wednesday ahead of the weekly Initial Jobless Claims on Thursday. These figures could give a clear direction for USD/RUB. Also, the headline surrounding Russia’s war in Ukraine remains in focus.