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In view of Piotr Matys, EM FX Strategist at Rabobank, while President Trump and President Putin made constructive comments at their historic summit in Helsinki, the positive impact on the ruble has been offset by the negative reaction not only from US Democrats, but more importantly from prominent Republicans.

Key Quotes

“Strong criticism of President Trump from both sides of Congress implies that the sanctions imposed on Russia for the incorporation of Crimea, the destabilisation of Eastern Ukraine and for its alleged attempts to influence the 2016 presidential election are set to remain in place.”

“Our very cautious optimism that latest meeting may bring at least some respite to the tense relationship has also faded – not because of lack of encouraging comments from both presidents who are firmly in favour of normalising US-Russia relationships, but due to critical response from Republicans and Democrats. Essentially, instead of improving sentiment towards Russia in Washington, President Trump may have done the opposite.”

“Another factor that prevents the ruble from gaining a better traction against both the US dollar and the euro is the sharp fall in oil prices. Admittedly, the correlation between oil and the ruble has been relatively weak over the past few months.”