RUB likely to weaken moderately versus USD over next 3 months

With the OPEC's decision to leave production limits to its members, earlier this week, there was a resumed weakness in RUB. 

Despite of this weakness, the volatility of the currency remains low, while USD/RUB 3month at the money option volatility levels are 25% low, compared to August 2015's local maximum.

There is no significant impact seen on the currency if the central bank cuts its policy rates. The OFZs would be benefited ahead from the anchored expectations on policy easing that is resumed.

"We expect the RUB to weaken moderately against the USD over the next three months to 71.00 and 73.00 in 12M. In the short run, we expect the Fed's tightening to weigh on the RUB and emerging markets assets globally", says Danske Bank in a research note. 

In long run, the rouble would be determined by oil price, the country's current account surplus and its economic growth.

Currently, USD/RUB is trading at 69.22, while EUR/RUB is trading at 76.18.