USD/RUB surges above the 96.40 area amid the Russian Ruble weakness, traders await US PCE data

USD/RUB gains momentum for the third consecutive day during the early European session on Thursday. The pair currently trades near 96.40, up 0.27% on the day. The Russian Ruble devalued to over 96 against the US Dollar, a 16-month low due to the economic challenge in Russia

Russian President Vladimir Putin stated last week that the economy was expanding again and that wages were increasing. According to Sputnik, Russia has overcome the Federal Republic of Germany to become one of the world's top five in terms of purchasing power parity and economic size.

Furthermore, Finance Minister Anton Siluanov said on Saturday that the Russian economy is forecast to expand by at least 2.5% in 2023, while inflation is anticipated to hover around 6%. He also said that he would cooperate with the Central Bank to implement all necessary steps to reduce inflation to the desired level. It’s worth noting that the Bank of Russia hiked the interest rate by 350 basis points (bps) to 12% on August 15 to halt the ruble's slide amid the the turmoil in Ukraine war.

On the US dollar front, markets believe that the Federal Reserve (Fed) might end its tightening policy sooner than anticipated, even though Federal Reserve (Fed) Chairman Jerome Powell said that a possible further rate rise would be dependent on incoming data. The condition of the labor market may influence the USD's short-term direction and the release of US employment data later this week could trigger market volatility.

Looking ahead, traders will monitor the headlines surrounding Russia’s war in Ukraine. Later in the day, the US Core Personal Consumption Expenditure Price Index (PCE), the weekly Jobless Claims, and the Chicago PMI will be due. The attention will shift to the closely watched US Nonfarm Payrolls on Friday. The US economy is expected to create 170K jobs for August. Traders will take cues from the data and find opportunities around USD/RUB.