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Introduction

The past two years have been a roller-coaster ride for the USDRUB. The Rouble (RUB) was the worst performing currency in 2014 but it has had a remarkable turnaround and is now on of the best performing currencies in 2015 to date. This article looks at the state of the Russian economy and currency.

Russia’s economic indicators

  • Gross Domestic Product
With a population of more than 143 million people, Russia ranks in the top 10 of the global economies by GDP. According to IMF statistics the GDP in Russia stood at USD 2,709.13 billion in 2013 before shedding 31% to USD 1,857.46 billion in 2014. The GDP is expected to fall further in 2015 as the oil prices remain depressed, economic sanctions likely to remain in place and the geopolitical tensions least likely to ease in 2015. Fig 1 shows the GDP statistics for 2013 and 2014 as well as projections to 2020 (in white).
Fig 1: Russia’s GDP and GDP estimates
  • Inflation
Annual inflation rate in Russia slowed to 15.8 percent in May of 2015 from 16.4 percent in the previous month as increase in cost of food and housing eased. Fig 2 below shows the inflation developments in 2014 and 2015.
Fig 2: Russia’s Inflatio
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YuliyaNaumova avatar

good job

Agnessa26 avatar
Agnessa26 27 June

Good job =)

Natalia_Kisenko avatar

very interesting!

Olga18375 avatar

Good article, as always!!!

wienerschinken avatar

Lol seems that ma and macd are working perfectly on this pair. Good article.

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9/30
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On December 15th, at midnight, the Russian Central Bank held an emergency meeting. The currency was in free fall, caused by a deadly mix of lower oil prices and western sanctions. The Rouble lost almost 50 percent of its value in four short months. On December 15th, the USD/RUB closed the day at 65.82, a massive 15 percent higher in a single day. Something had to be done.
The Russian Central Bank decided to hike interest rates by a shocking 650 basis points, from 10.5% to 17%. ‘’We had a choice between the very bad and the very, very bad’’, Sergei Shvetsov, the deputy governor of Bank would later say.
A Flash From the Past
I woke up that day staring at a 10% gain in the Ruble. The USD/RUB was now quoted at 59.50. After a quick double-take and a check on Bloomberg, I realize the reason behind the rally. But as everyone was busy buying Rubles, I got a flashback of Black Wednesday 1992. During most of 1992 Britain was busy propping up the Pound in order to keep it within the boundaries set by the ERM (Exchange Rate Mechanism). After spending massive amounts of money, the Bank of England took one last desperate step.
On September 16th 1992 at 11:00 AM, the BOE jacked up …
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Convallium avatar
Convallium 27 Jan.

wonderful article! I sometimes trade with usd/rub

fxsurprise8 avatar

During the weekend Russia intensified its offensive in Ukraine. A shelling that killed 30 civilians in Mariupol sparked new calls for sanctions in Brussels. The EU called an extraordinary meeting of foreign ministers for Thursday but analysts think that there will be no new sanctions until next month summit. A lot will depend on how far Putin goes this time. An all out attack on Mariupol will no doubt lead to further US/EU sanctions.

I got again long USD/RUB on Monday anticipating the reaction of the West. Near the end of day I got a present by S&P, which downgraded Russia's debt to junk.

fxsurprise8 avatar


Here are some links as well as a picture of my most recent trades. Sorry for the poor formatting, Dukascopy automatically places everything at the top.

Again my total loss is limited to just $100. My stoploss is set at 62.60, just below the most recent swing low in the pair. My target is above the December highs in the USD/RUB, around 77.80. I will watch price action if we reach these levels and look for an exit. As you can see on the pic, I'm currently up $50.

fxsurprise8 avatar

Another update: The Ruble selling intensified on Friday after the Russian Central Bank unexpectedly cut interest rates from 17% to 15%. This prompted me to add another position of 2,000 on a break of the important 70.00 round figure.

Initially the trade went in my favor as the USD/RUB rallied to a high of 71.87 on Friday. The pic above was taken near the highs of the day. But as the day was nearing its end, the jump in oil prices led to gains in the Ruble and I was forced to close my new 2,000 position at 70.52 for a small gain of $12.

fxsurprise8 avatar

Final update on my January Ruble trades. The rally in oil continues unabated after a Friday report that showed the number of U.S. oil-drilling rigs down by 94 in the past week, the largest one-week decrease since 1987. As the black gold was preparing to break the important 50.00 mark, I placed a stoploss on my two remaining USD/RUB longs at 68.30.

I was taken out later in the day, for a net profit of $64.50. Together with my earlier closed trade of $12.13, the total for this series of trades is at +76.63. You can see all 3 trades in the pic above.

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