- Summary:
- The USD/RUB exchange rate pulled back slightly after it soared to a high of 74.67 in the first week of 2023. What next for USDRUB?
The USD/RUB exchange rate pulled back slightly after it soared to a high of 74.67 in the first week of 2023. It was trading at 67.64, which was significantly lower than the year-to-date high of 74.67. It is about 36% above the lowest point in 2022. So, what next for the USD to Russian ruble exchange rate in 2023?
Russian ruble under pressure
The USD/RUB price has risen sharply from the lowest point in 2022 as investors reacted to the happenings in Russia and Ukraine. For one, Ukraine has mostly defeated Russia as it has recaptured some of the top strategic cities. The war is still raging and anything can happen, especially as it continues to prolong.
The pair has also risen as the prices of key Russian commodities ease. Natural gas price has crashed to the lowest level since 2021. Prices have crashed because of the warmer winter and the fact that many European countries have substituted Russian gas with liquified natural gas (LNG) from the likes of Qatar and United States. Germany has completed building an LNG terminal in a record pace.
Falling natural gas prices mean that Russia coudld come under pressure to fund its budget. Besides, it now needs to invest billions in infrastructure to ship gas to other countries like India and China. The same is true with crude oil, whose price has fallen sharply from its peak in 2022.
Media reports say that western sanctions are having an impact on Russia’s oil production and exports. And analysts expect that oil production is set to drop to about 9.3 million barrels per day from over 10 million.
A likely saviour for the Russian ruble is that the US dollar is expected to drop in 2023. Recent data shows that the American inflation has been falling lately. If this trend continues, the Federal Reserve could be forced to pivot, which will support emerging market currencies.
USD/RUB forecast
The daily chart shows that the USD to RUB exchange rate has been in a slow bullish trend in the past few days. It has managed to move from a low of 50 in June 2022 to a high of 75. The pair moved above the upper side of the symmetrical triangle pattern shown in yellow. It is being supported by the 50-day and 100-day moving averages.
Therefore, the pair will likely continue rising n the coming days. My view is that it will retest the psychological level of 100 in 2023. This view is in line with my USDRUB exchange rate forecast.
