RUB faces uncertainties into 2017 – Danske Bank

Senior Economist at Danske Bank Vladimir Miklashevsky shared his mixed views on the prospect for the Russian currency.

Key Quotes

“Given the uncertainty on Trump’s fiscal policy plans, there are clear upside and downside risks for our forecasts on the pair. Soaring reflation expectations in the US would weigh on global emerging market sentiment and weak oil would hitthe RUB, while an improving Russia-US relationship and eased sanctions would create appetite for the RUB. If the oil deal does not hold, it willweigh on the RUB through falling crude”.

“In 2016, the RUB was the best performer among 150 global currencies. Yet, if the stronger USD story continues in 2017 on Trump’s fiscal expansion promises and the Fed’s moderate tightening, it will cool down RUB’s excessive appreciation”.