USD/RUB forecast: What next after the Russian ruble surge?

The Russian ruble has had a great performance this year, even as crude oil and natural gas plunged. The USD/RUB exchange rate was trading at 77.20, down by 35% from its highest point in November last year.

Why the Russian ruble soared

The Russian ruble soared after Donald Trump’s election in 2024 as investors remained hopeful that he would negotiate a deal to end the war in Ukraine. 

While the war is still going on, the three sides have continued their negotiations, and odds of a ceasefire by the end of 2026 have jumped to 46% on Polymarket. 

Any deal will have a provision to remove the sanctions that the United States has on Russia, a move that will benefit the economy. 

The USD/RUB has also plunged because of the actions by the Russian Central Bank, which has maintained higher interest rates than other countries, creating a good carry trade opportunity.

The bank slashed rates to 16% in the last meeting as inflation softened to 5.8%. As such, it has become common for forex traders to borrow cheap US dollars and invest in the high-yielding ruble.

The main challenge, however, is that investing in Russian assets has become difficult in the past few years because of the sanctions. This difficulty could be eased once sanctions end. 

The Russian ruble has also jumped because of the lack of demand for foreign currency in Russia because of the sanctions. 

Additionally, the central bank has continued to sell foreign currency through its yuan and gold sales to replace lost energy revenues. Recent data show that oil and gas revenue in Russia dropped by over 20% in the first 11 months of the year.

US dollar decline

The USD/RUB exchange rate decline was also due to the US dollar decline. After peaking at $110 in January, the US dollar index tumbled to $96 before stabilizing at $100. 

There are chances that the US dollar index will continue with its downward trend in the coming months. For one, the bank has hinted that it will cut interest rates once in 2026, continuing a cycle that started a few months ago.

The rate cuts will likely be more as Donald Trump has hinted that he will only appoint a Fed official ready to cut rates. An aggressively dovish Fed will be bearish for the US dollar. 

USD/RUB technical analysis

The daily chart shows that the USD/RUB exchange rate has come under pressure in the past few months. It plunged from the double-top point at 113.75 to the current 77.20. 

Most recently, the pair moved from a high of 85.91 to the current 77.20. It has remained below the 50-day and 100-day Exponential Moving Averages.

The pair also formed a small double-top pattern at 80.65. Therefore, the most likely scenario is where the pair continue falling as sellers target the year-to-date low of 74. This retreat will accelerate as investors anticipate the deal between Ukraine and Russia.