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Economists at Credit Suisse raise the USD/RUB short-term target range slightly to 73-77 (from 72-76 previously) after the pair reached a multi-week high of 76.67 on Wednesday of last week but then fell and has managed to stabilize so far this week within a range of 74.5-75.5. The new target range continues to reflect the view that the rouble will remain weak relative to oil prices in the coming weeks because of lingering geopolitical risks. 

Key quotes

“The increase in our USD/RUB expected target range captures two recent rouble-negative developments. Germany’s investigation into Navalny’s situation and a fall in Brent crude prices of about $5/bbl since our update two weeks ago.”

“We still see mainly upside risks to our new 73-77 range. Due to heavy long positioning in roubledenominated assets, markets would probably respond negatively if new adverse geopolitical headlines were to emerge, and in that scenario USD/RUB might well revisit its April high (77.76).”