Amid Russia’s voluntary oil reduction, USD/RUB dropped by about 97.70, with attention on US economic data.

Amidst the surge in oil prices, USD/RUB lost steam close to 97.70.

In 2023, Russia’s economic growth is projected to be in the upper range of 1.5%–2.5%.

Investors expect the Fed to raise interest rates by 25 basis points (bps) over the course of the year, to 5.75%.

On Wednesday, the focus will be on US ISM Services PMI data.

The USD/RUB fell below 98.00 during Wednesday’s early European session. The pair is up 0.79% for the day as of right now, trading at about 97.70.

According to Reuters, deputy governor of the Russian central bank Alexei Zabotkin stated on Tuesday that Russia’s economic growth this year will be in the upper half of the 1.5%–2.5% predicted range. Moreover, Anton Siluanov, Russia’s Finance Minister, predicted this week that the country’s GDP would grow by at least 2.5% in 2023 and that inflation would be roughly 6%. Additionally, he declared that he would work with the Central Bank to take all necessary actions to reduce inflation to a level that is sustainable.

Aside from this, the Russian Ruble strengthened on Wednesday as a result of an increase in oil prices following the country’s extension of its voluntary cuts to its oil production. Nevertheless, the two largest oil exporters in the world, Saudi Arabia and Russia said that they would continue to reduce oil production through the end of 2023. According to Deputy Prime Minister Alexander Novak’s announcement on Tuesday, Russian exports will decrease by 300,000 barrels per day through the end of 2023.

The country has raised its military spending target for 2023 to more than $100 billion, which represents a third of all state expenditure, so the upside of RUB is restricted. This is because Moscow’s finances are becoming more and more stretched as a result of the growing costs of the conflict in Ukraine. This might therefore provide the USD/RUB pair with a tailwind.

The World Interest Rates Probabilities (WIRP) tool indicates that market participants anticipate a 25 basis point (bps) rate increase from the Federal Reserve (Fed) for the full year, bringing rates to 5.75%. The Fed has more room to raise interest rates, according to Fed Governor Christopher Waller, but the data will show whether or not the Fed needs to raise rates once more.

The US ISM Services PMI data, which is due on Wednesday, will be the market players’ next focus before Thursday’s weekly Initial Jobless Claims report. These numbers may provide a distinct direction for USD/RUB. The headline pertaining to Russia’s conflict in Ukraine is still prominent.

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