USD/RUB Remains Strong Despite A Pullback In DXY Index
USD/RUB is showing strength amid a weakness in the dollar strength index. Russian Ruble seems to be weakening once again after gaining some strength in the first half of August. Technical analysis suggests that bulls may target 100 level in the coming weeks.
USDRUB has been on a tear since its bottom in July 2022. During this time, the US dollar to the Russian ruble has soared more than 83%. On a yearly timeframe, the forex pair is up 33% since the start of 2023. The weakness in Russian currency can be attributed to a lot of different factors, which are mentioned below.
Russian Ruble Tumbles As Trade Surplus Sinks
Russian import bill has significantly increased since the start of the Ukraine conflict. This has resulted in a sinking trade surplus for the Kremlin. In June 2023, the trade surplus fell 75%. This was also a 53% decrease from the pre-conflict levels.
It appears that the capital controls and the emergency rate hikes have also failed to control the surge in USD/RUB. Russian households and firms seem to be fleeing to foreign assets, which is adding fuel to the fire. Another cause of concern is the deteriorating Chinese economy, which is one of the biggest importers of Russian oil.
USD/RUB May Target 100 Soon
Technical analysis of the following chart shows that the USDRUB is rising once again after a brief pullback at the start of the month. The forex pair faced a correction from the 102 point level which is the 0.5 fib retracement level. If it gains strength above this level, 114 could be a valid price target for the bulls.
USD/RUB forecast is looking extremely bearish as the rubble is depreciating despite a 0.87% correction in the DXY index. It seems only a matter of time before the pair retests the 100 level once again. The hawkish US Federal Reserve will also keep affecting the exchange rate in the coming months.
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