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February 25, 2016

USD/RUB Analysis and Predictions for 2016

For more than one year ago, Russian Ruble suffered from fluctuations that caused traders to go short on USD/RUB, while brokers did their trick by increasing swap values on currency pairs that included ruble, and by limiting leverage on such pairs.

USDRUB 1-year Chart

Initially, fluctuations were around 30-36 rubles per dollar, but in the beginning of December it went to nearly 80 rubles per dollar. Those fluctuations were partly resulting from political events in the Eastern part of Ukraine and trade embargo that was imposed on Russia.
Along with Forex trading, there are other commodities that are being traded as well. It is well-know that Russia is the second largest producer of oil and on the 3rd place in oil import. With all that, USD/RUB rate highly correlates with the price of oil.
There is a strong negative correlation between USD/RUB and WTI prices. Negative correlation means that lower the price of oil gets, the more rubles will be paid per dollar.
There is another commodity in Russia that is strongly correlated, and that is also important for Russia’s economy – naturalgas. The price of natural gas is experiencing downfall as well.


Interventions made by Russian Government influence the prices of USD/RUB to the high extent. If you have observed closely, the value of USD/RUB was falling during the first quarter of 2015. At that point, USD/RUB moved from 70 rubles per dollar to just about 50.

Impact on foreign trades

When the price of a country’s currency decreases, that means that country is not importing goods for higher prices, so from there it goes logically – it becomes more profitable to export goods. At this moment, Russia has a very strong trading profile due to its export which is greater than the import. However, Turkey, as one link in that chain, has always been important trading partner for Russia, but since the latest developments in politics, it is possible that this relationship will deteriorate.

Predictions for 2016

If you wish to invest in Forex, USD/RUB presents a viable option as volatility was quite high in 2015 and this pair should show great results for a relatively short time. According to our predictions, the price of oil will drop further and the same applies to the natural gas prices, which will also drop, and that should trigger the drop of USD/RUB correspondingly, to around 80 rubles per dollar. This level should be watched carefully, because such rate could also trigger another intervention from the Russian Government. Therefore, it is suggested to go short on USD/RUB after the price has passed 82 rubles per USD.
Even though technical analysis is important in day trading, you should not totally rely on it when trading any currency pair that includes RUB in it.
It would be wise to pay attention to fundamental events, because they can contribute to the changes in the rate of ruble. Analyze all the important events and watch for the indicators that can warn you of possible changes in trend.

The Dolce Whey at Onnit.com!

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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