Political and financial instability in Western countries “worries” global currencies. They behave in an unpredictable way, showing higher volatility. Emerging currencies cannot boast stability as well. In this article, we will take a look at the Russian Ruble and its prospects against the US Dollar. Masterforex-V Academy will help us with that.
Dollar Keeps Weakening As Fed Keeps Easing
The start of this trading week was slightly unexpected for Forex traders. While the Euro keeps rallying for the second consecutive week, the US Dollar showed unexpected weakness against the Russian Ruble. The Ruble, we must confess, gained some strength against the bi-currency basket.
Some experts say this process concerns the Ruble only, i.e. it is the Ruble that is strengthening in general instead of the US Dollar showing signs of weakness. However, the global currency market has been seeing the overall weakening of the US Dollar for weeks since the Fed decided to abstain from tapering its accommodative policy despite numerous promises to do it in September.
The Fed’s decision concerning QE is pressing the US Dollar, simultaneously supporting emerging currencies like the Russian Ruble. Still, there is one more seasonal factor that traditionally support the Russian Ruble against its American counterpart. This is taxation season.
At the same time, the flight of capital form Russia is still going on at the same pace, which keeps pressing the Russian currency and may well lead to its devaluation against the Euro and the US Dollar.
As of September 17th, the official exchange rate set by Russia’s central bank is 32,2907 RUB per 1U USD. The rate declined by 0, 45 RUB. The chart below, courtesy of Masterforex-V Academy, confirms that:
Russian Ruble: Prospects
Experts say the US Dollar exchange rate will be determined by the Fed’s willingness to taper its accommodative policy through cutting down on bond purchases. If to consider a change of power in the Fed, we may well expect further dollar weakness. Still, if the tapering does take place in the near future, we will definitely see the US Dollar recovering fast.
As for the Ruble, this state of affairs gives the Russian currency good chances to continue its rally against major currencies, including the Dollar. On top of that, experts say Russia won’t see any threats of destabilization in the near future. Amid Russia’s success in the peaceful resolution of the Syrian issue, the strengthening of the Russian Ruble looks more probable, if not predictable….
