The Russian ruble has eased modestly against the US dollar in February even as conditions in Russia make some improvements. The USD/RUB exchange rate jumped to a high of 93.44 on Friday after the death of Alexei Navalny led to calls for more sanctions on Russia. This is a strong recovery for a pair that was trading at 86.5 when the month started.

Russia is doing well

The USD/RUB pair has jumped recently as the US dollar index (DXY) has jumped to $104. This rally happened even as signs show that the Russian economy is doing well. For one, the country is still shipping substantial barrels of crude oil around the world. 

The WSJ has a report on how companies like Nord Axis, a relatively unknown Azerbaijani company was helping Russia move its barrels globally. The company has shipped oil worth over $33 billion since the war started. Most importantly, Russia has managed to sell its oil at a price above the $60 level that Western countries have placed.

Most importantly, Russia has reinvigorated its industrial base as thousands of people work in the weapons manufacturing industry. These people are making thousands of weapons that have helped the country hold to its positions in Ukraine. As a result, Russia’s unemployment rate stands at less than 3%.

Further, to a large extent, Russia has managed to avoid the worse of Western sanctions. It has continued to use various manouvers to buy items and technologies like chips that it is prohibited from buying. It is using foreign opaque companies to implement these trades. Also, the country has learn to adopt to the new normal by doing most of its trade with Asian countries.

The only challenge facing Russia is that the prices of its other commodities has plunged. The price of natural gas has plunged to its lowest point in over 3 years and has dropped by over 50% from its highest point in 2022. Russia is one of the biggest sources of natural gas. It has now been overtaken by the likes of the United States.

Wheat, another important Russian commodity, has also plunged by over 28% from its highest point in 2023. It has dropped in the past three straight days and is now hovering near its lowest point since November. Other commodities like copper, coal, and nickel have also retreated this year.

USD/RUB technical analysis

USD/RUB

USD/RUB daily chart

The daily chart shows that the USD/RUB pair has staged a strong comeback in the past few weeks. It has risen from slightly over 86 to 93. Along the way, it has moved above the 50-day moving average and the Ichimoku cloud. The Relative Strength Index (RSI) and the MACD have pointed upwards.

Now, the pair is at its make-or-break point since the current price is along the highest point in December last year. Therefore, a break above this level will point to more upside for the USD/RUB or Russian ruble weakness. This move could open the possibility of it rising to 95. On the other hand, there is a likelihood that the pair will turn downwards as bears target the lower side of the channel at 86.

By Crispus Kanyaru

With a keen eye for market trends and a knack for translating complex financial concepts into engaging narratives, Crispus has established himself as a trusted voice in the world of finance. His work has graced the pages of esteemed publications like Benzinga, Forbes, Invezz, and Banklesstimes, reaching a diverse audience eager to navigate the ever-evolving financial landscape. Crispus's journey began with a deep curiosity about the forces shaping the global economy. This natural inquisitiveness led them to pursue a degree in finance and CPIA, equipping them with a solid foundation in financial theory and analysis. But Crispus knew that knowledge alone wasn't enough. He craved to bridge the gap between dry data and real-world experiences, to make finance accessible and relatable to everyone.

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