USD-RUB

USD/RUB Trading

USDRUB is the ticker symbol for the United States dollar to Russian ruble exchange rate in the forex markets. USDRUB is an exotic currency pair because one of its constituent currencies is that of an emerging nation, Russia. Exotic currency pairs typically feature low trading volumes and overall illiquidity, and they are traded with relatively higher spreads compared to major and minor currency pairs.

In the USDRUB Forex rate, the USD is the base currency, while the RUB is the quote currency. Thus, the price of the USDRUB pair at any given time represents the number of Russian rubles it would take to exchange for one unit of the US dollar (I USD to RUB).

History of USDRUB

The USD to RUB pair combines currencies of two rival and contrasting global political and economic powers. The US dollar is the official currency of the United States of America and its territories. It is the most widely used currency in the world (both in reserve and circulation) as of September 2022, and it stands as one of the most powerful and traded currencies in the forex markets. Popularly referred to as the ‘Greenback’, the USD was introduced following the Coinage Act of 1792. The USD grew globally as the United States established itself as a significant global power. It became one of the most important global currencies towards the end of World War I, as the dominant British Empire crumbled. The establishment of the Bretton Woods system, which saw major global economies practically peg their currencies to the US dollar, was a defining moment for the currency. The system’s collapse in the 1970s cemented the USD’s position as the most influential free-floating currency in the world. The dominance has continued to date, with the bulk of international trade denominated in USD. At least 100 countries and territories have pegged their currencies to the greenback, and over 60% of global central bank reserves are held in USD. The US economy’s size and strength, historical political stability, and military superiority have continued to sustain the power of the USD over the years.

On its part, the Russian Ruble is the official currency of the Russian Federation. The RUB has been in circulation as early as the 13th century, making it the second-oldest currency in the world, behind only the Sterling pound. Having been used by both the Russian Empire and the Soviet Union, the RUB has survived significant turbulence and continues to be an important currency. Russia is a major producer and exporter of crude oil and natural gas, making the RUB one of the demanded currencies in the forex market. The country is also a major exporter of iron, gold, coal, and steel. Other thriving industries in Russia include Manufacturing, Forestry, Agriculture, and Fishing. Following persistent political conflicts with the US over the years, Russia has openly pursued efforts to establish the RUB as an important petrocurrency – this will require importers of Russian oil to pay in Russian rubles, a move that strengthened the currency during the second quarter of 2022.

USDRUB Historical Price Performance

When we view the USD/RUB technical analysis, in the early 2010s, the USDRUB pair was generally stable, trading around the 35.00-handle. But it began an upward momentum in late 2014 and sharply climbed to above 76.00 by January 2016. It then sustained a sideways trend until late 2021, when Russia’s military conflict with Ukraine triggered sanctions, whose impact drove the USDRUB pair to peaks of above 135.00. Russia’s aggressive response to protect the Ruble saw the pair tumble from those heights to trade around 96.00 as of September 2022.

Major Bodies Influencing the USDRUB

When engaging in USD/RUB trading, here are some factors to consider:

The Federal Reserve

The Federal Reserve is the central bank of the United States of America. It is tasked with maintaining price stability and ensuring a sound and dynamic monetary and financial system that will foster prosperity for the US. The Fed releases its interest rates eight times yearly and details its monetary policy stance during those events. Rate hikes tend to strengthen the USD, whereas rate cuts pressure it lower. Outside those events, USD traders also watch out for minutes of previous Fed meetings (especially those of the FOMC committee). A general hawkish tone implies that a rate hike is being considered, which tends to strengthen the USD. On the contrary, an overall dovish outlook implies that a rate cut is on the agenda, weakening the USD.

Bank of Russia

This is the central bank of the Russian Federation. It is mandated to ensure price stability and implement sound financial and monetary policies. The Bank of Russia has strived to maintain inflation at 4%, with its actions generally informed by this target. The bank also works in conjunction with the Russian Finance Ministry to intervene in the forex markets when necessary. 

USDRUB Correlations – USD to RUB Trading

Tracking correlated assets can help traders prevent counterproductive trading decisions, boost profits, hedge risks, and even confirm breakout signals. The USD/RUB pair tends to be positively correlated with the GBPSEK, USDSEK, XAUAUD, and XAUEUR. The pair tends to be negatively correlated with the USDCNY, EURSGD, SEKJPY, and EURZAR.