RUB’s outlook remains constructive – Danske Bank

The perspective for the Russian currency in the next months remains constructive, suggested analysts at Danske Bank.

Key Quotes

“Russia’s rouble has continued to outperform other emerging market currencies. It has been the top performer of the 24 emerging market currencies over the past three months, while gaining the most from the Fed’s decision to hike rates on 14 December and its more hawkish guidance for 2017”.

“While the rouble has been supported significantly by the pledge of the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC economies to cut oil production, the Fed’s hawkish stance has restrained the RUB’s excessive rally”.

“We keep our moderately bullish stance on the RUB, as we believe a disruption of the oil deal would present significant upside risk for our USD/RUB pair forecast”.

“On the back of the agreement to cut oil production, we expect the USD/RUB to hit 61.10 in 1M (previously 66.50), 60.00 in 3M (previously 63.30), 56.20 in 6M (previously 59.50) and 53.20 in 12M (previously 57.10) on a Brent crude price assumption of USD59/bl in Q4 17”.