USD/RUB likely to trade around 64 by end-2016 and 62 by end-2017, says Lloyds Bank

The USD/RUB currency pair continues to stay within its multi-month range; however, recently, the pair has tested both the upper and lower bounds, noted Lloyds Bank in a research report. As crude prices rose, after the OPEC’s broad agreement to curb production, the USD/RUB pair declined to a low below 62. But with oil prices selling-off over 13 percent from their October highs as a response to the rising disagreement around individual country quotas, and the FOMC seeming more likely to hike rates in December, the USD/RUB pair rallied strongly towards 66.

There is scope for the continuation of this upward momentum in this currency pair. This is because Donald Trump’s victory in the U.S. election race has seen an extension to the sell-off in emerging market currencies more broadly, said Lloyds Bank. Although the pressure on emerging market currencies and the move lower in crude oil prices tend to be for temporary period, there are many reasons to believe that Russian policy makers would limit how far the currency pair is permitted to fall past recent lows, added Lloyds Bank.

According to Lloyds Bank, the USD/RUB pair is expected to trade around 64 by end-2016 and around 62 by end-2017.