The USD/RUB price has been in a tight range in the past few days even as the US dollar rally gains steam. It is trading at 59.87, where it has been since July. This price is a few points above this month’s low of 50.83 and is about 61% below the highest level this year. This means that the Russian ruble is one of the best-performing currencies this year.
Russian ruble strength continuing.
There are several reasons why the Russian ruble has done well in the past few months amid the sanctions. First, the Russian economy has continued benefiting from the elevated prices of natural gas and oil. Analysts expect that Russia will continue benefiting from these commodities prices for a while. For one, there are signs that OPEC+ will lower its production in a bid to keep oil prices steady.
Second, the USD/RUB and EUR/RUB have dropped because of the rising demand for the Russian ruble. In addition, the Russian government made a decree that forces countries in Europe to buy natural gas using the currency. All this has led to more demand for the currency. Analysts believe that Russia will continue forcing more countries to use the currency to pay for its key products.
Third, the government placed several restrictions to prevent capital from leaving the country. For example, it blocked large transactions by both individuals and companies. All these actions have made it easy for the Russian central bank to stabilize the currency. While other central banks have continued hiking rates, the bank has made several rate cuts. Besides, the strong Russian ruble has helped to offset the rising inflation.
The daily chart shows that the USD to RUB exchange rate has been in a tight range in the past few days. Along the way, the pair consolidated along the 25-day and 50-day moving averages while the Stochastic Oscillator moved to the neutral point. It is also slightly below the important resistance point at 69.28.
Therefore, the USD/RUB pair will likely remain in the current range as investors wait for the next key catalyst. The next key support and resistance levels to watch are at 50 and 69.28.