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The Ruble's rise


In the last 6 weeks the Russian currency has significantly appreciated against the USD dollar. The accurate figures are +21% in 10 weeks, impressive in particular for currencies.
This phenomenon is interesting because of two reasons:

1.    The US dollar outperforms against almost all of the major currencies, implying the Russian Ruble has a good story behind its behavior.

2.    This event (Ruble appreciation) is rare in the last few years.

So how has this turn around occurred?

The largest industry in Russia is Oil and Gas. After a long period where crude oil reached an historical low around $26, it seemed a turning point was established in Oil prices. As long as oil prices will be traded above $40 it will reinforce Russian productivity and its economy. As a result of this process the Russian Ruble will appreciate.

Another significant factor is the improvement in geopolitical conditions and international atmosphere regarding Russian actions recently. Russian warplanes left Syria, raising U.N. hopes for peace talks. The improvement in geopolitical conditions towards Russia decreases the uncertainty and incentivizes international investments in Russia which is reflected in the Ruble appreciation’s.

One man's loss is almost always another one's gain, as is the case here with USD/RUB. This surprising trend is going strong and justifies follow up.

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