USD/RUB to push modestly higher in the coming months – Lloyds Bank


Analysts at Lloyds Bank suggests that a combination of looser monetary policy and the need to rebuild both foreign exchange and central government reserves will push USD/RUB modestly higher in the coming months.

Key Quotes

 “Sharp swings in crude oil prices made the Russian ruble the second most volatile EM currency over the past month, just behind the South African rand. More recently, increased geopolitical risk related to Russian military involvement in Syria have added to the possibility of further unexpected gyrations against the US dollar.”

“Nevertheless, we hold to our core belief that a combination of looser monetary policy and the need to rebuild both foreign exchange and central government reserves will push USD/RUB modestly higher in the coming months. The Russian finance ministry announced in April that it would increase FX purchases from 3.2bn to 3.5bn rubles a day. Meanwhile, in March, the Russian central bank surprised markets by cutting its policy rate by 25bps to 9.75%. The CBR estimates that the “neutral” interest rate for the economy lies between 2-3%. Therefore, even if crude oil prices rise from current levels we would expect them to be matched by lower policy interest rates.”

Share: Feed news

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. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD remains on the defensive below 0.6450, investors await Australian CPI data

AUD/USD remains on the defensive below 0.6450, investors await Australian CPI data

AUD/USD remains on the defensive near 0.6420 during the early Asian session on Monday. The Federal Reserve media blackout went into effect at midnight Friday. Nonetheless, the US central bank has delivered hawkish messages in recent weeks and markets expect the first cut in September. 

AUD/USD News

EUR/USD touches five-month low on growing expectations that ECB will ease before Fed

EUR/USD touches five-month low on growing expectations that ECB will ease before Fed

EUR/USD managed to counter a poor start of the week and reverse course despite the European currency slipping back to the 1.0600 key support against the US Dollar, or five-month lows.

EUR/USD News

Gold: Will geopolitics continue to drive XAU/USD?

Gold: Will geopolitics continue to drive XAU/USD?

Gold price fluctuated in a relatively narrow range this week following the record-setting rally. Investors will continue to pay close attention to headlines surrounding the Iran-Israel conflict and scrutinize key macroeconomic data releases from the US this week.

Gold News

A breakout or significant price movement may be imminent for Ripple’s token

A breakout or significant price movement may be imminent for Ripple’s token

Ripple has been range-bound for a while, with token holders patiently holding as the ecosystem contended against the US Securities and Exchange Commission. As per a recent report, the payments token’s price has been stuck below $0.50, failing to breach key resistance levels.

Read more

Week ahead: US GDP and BoJ decision on top of this week’s agenda

Week ahead: US GDP and BoJ decision on top of this week’s agenda

US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap. Earnings season heats up as tech giants report.

Read more

Forex MAJORS

Cryptocurrencies

Signatures