28 Jan 2015
USD/RUB could hit 70.00 in 3-month – UBS
FXStreet (Edinburgh) - Strategists at the Swiss lender UBS remain bearish on the Russian ruble, highlighting at the same time risks of going long USD/RUB.
Key Quotes
“On Friday, the Central Bank of Russia will announce its policy rate decision, and we expect more volatility in the coming days”.
“Currently, a Bloomberg survey indicates that market participants expect the key rate to stay at 17%”.
“We think this is a reasonable expectation, but see a higher likelihood of a rate hike than a cut”.
“Having said that, as seen in recent months, the central bank's measures to offset pressure on the ruble have a limited impact when external pressure mounts”.
“A rate cut would most likely lead to further RUB weakness in the current environment”.
“We reaffirm our USDRUB forecast of 70.0 in three months, 68.0 in six months, and 65.0 in 12 months”.
“Despite the high interest-rate carry, we do not recommend long positions in the ruble due to low oil prices, deteriorating economic conditions, and ongoing tensions in eastern Ukraine”.
Key Quotes
“On Friday, the Central Bank of Russia will announce its policy rate decision, and we expect more volatility in the coming days”.
“Currently, a Bloomberg survey indicates that market participants expect the key rate to stay at 17%”.
“We think this is a reasonable expectation, but see a higher likelihood of a rate hike than a cut”.
“Having said that, as seen in recent months, the central bank's measures to offset pressure on the ruble have a limited impact when external pressure mounts”.
“A rate cut would most likely lead to further RUB weakness in the current environment”.
“We reaffirm our USDRUB forecast of 70.0 in three months, 68.0 in six months, and 65.0 in 12 months”.
“Despite the high interest-rate carry, we do not recommend long positions in the ruble due to low oil prices, deteriorating economic conditions, and ongoing tensions in eastern Ukraine”.