EURRUB is the ticker symbol for the euro and Russian ruble exchange rate. EURRUB is an exotic currency pair because one of its constituent currencies is that of an emerging nation, Russia. Exotic currency pairs typically feature lower trading volumes and overall liquidity and are traded with relatively higher spreads than major currency pairs.
In the euro to RUB forex rate, the EUR is the base currency, while the RUB is the quote currency. As such, the price of EURRUB at any given time represents the amount of Russian ruble it would take to exchange for one unit of the euro (1 EUR RUB).
History of EURRUB
The EURRUB pair combines two influential European currencies. The euro is the second most powerful currency as well as the second most used (both in reserve and circulation), trailing only the US dollar USD). Over 340 million people actively use the euro on a daily basis. Additionally, more than 175 million people live in countries or territories that have pegged their local currencies to the euro. It was introduced in 1999 as the official currency of the Eurozone, a monetary union that consists of 19 states of the European Union. In its first 3 years, the euro operated largely as an ‘invisible’ currency used for accounting purposes and electronic payments. The euro officially started circulating as notes and coins in 2002.
The adoption of a common currency was one of the major provisions in the 1992 Maastricht Treaty that essentially was the foundation of the European Union. Its purpose was to facilitate commerce and payments within the region, as well as to eliminate exchange rate risk. Some of the major events that have impacted the euro in its history include the 2008 Great Recession, European Sovereign Debt Crisis, Brexit, and European Central Bank asset purchases. The euro has, however, maintained its resilience and stands as the second most traded currency in the forex markets as of August 2022.
On the other hand, the Russian ruble is the official currency of the Russian Federation. It is the second oldest currency still in circulation today, behind only the Sterling pound. It is believed that the term ‘ruble’ originates from the Russian verb ‘rubit’ which loosely translates to ‘chop.’ It is a reference to ‘chopped off’ pieces from silver bars that were early forms of coinage.
The ruble has survived through many challenging times that Russia has gone through, including the Russian Revolution and the Dissolution of the Soviet Union. Throughout its history, it has also followed monetary trends, being pegged to silver, gold, copper, and even oil. Russia is the 11th largest economy in the world by nominal GDP and is endowed with immense natural resources. Russia is a major exporter of oil, gold, iron, steel, wood, and wheat. The country is a commodity superpower whose impact on the global economy has been felt during its military invasion of Ukraine that began in February 2022. Sanctions placed on the country contributed to global shortages of key commodities required for human living. In the wake of the international sanctions, Russia moved ahead with plans of establishing the ruble as a major petrocurrency. In light of this, countries are required to purchase their oil using the RUB, and this artificially props up its value.
EURRUB Historical Price Performance
When we look at the EURRUB chart, the EUR/RUB pair traded around 27.80 at the turn of the millennium. The pair steadily drifted upwards to above 45.80 in early 2009. It then maintained a sideways trend until mid-2014, before sharply jumping to above 79.00 by early 2015 because of the oil crisis. It sustained a choppy price action since then, and by early 2022 it traded around the 87.00-price handle. The pair jumped above 120.00 following the February 2022 military invasion of Ukraine, but subsequent measures saw it dip sharply to below 58.00. EURRUB trades around 62.50 as of August 2022.
Major Bodies Influencing EURRUB EUR vs. RUB
When it comes to euro to ruble trading, here are some factors to consider:
The European Central Bank (ECB)
The ECB is the central bank of the Eurozone. It is the body with the single biggest influence on the euro. The ECB reviews its interest rates and outlines its monetary policy stance every month. The bank is well-known for its long-running asset purchase program that has since been wound down. ECB events (even unscheduled ones) can have a massive influence on the price direction of the euro.
Bank of Russia
The Bank of Russia is the central banking system of the Russian Federation. Its function is to ensure price and financial stability, as well as to create a competitive financial environment through monetary policy. The bank has, as of 2022, aimed to target inflation at around 4%, and this informs its monetary policy decisions. The Bank of Russia is very aggressive in protecting the ruble, and its events have a significant impact on the currency.
Assets that are positively correlated tend to move in the same direction over time; whereas those that are negatively correlated tend to move in opposite directions. In EUR/RUB trading, the EUR/RUB tends to have a positive correlation with the GBPRUB, USDRUB, GBPSEK, and USDSEK. The EURRUB pair also tends to have a negative correlation with the EURCNH, USDCNH, SEKJPY, and USDSGD.