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USD/RUB rally: Are markets forecasting pain in the Ukraine for Russia in 2023?

By Adrian Holliday

13:30, 29 December 2022

President Putin’s economic team have helped to shore up the rouble – but the future is far less certain.
Sergey Shoygu (L) and Putin (L2) watch a drill in Leningrad. Where is RUB headed in 2023? – Photo: Getty

USD/RUB hit 72.01 earlier, close to an eight month low. Will the rouble’s descent intensify in 2023?

It has been an extraordinary year for the Kremlin currency: in late June a dollar bought 52.3 roubles as Russia raked in record gas and oil revenues and the Russian central bank tried to weaken the currency as exports got ever pricier. 

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Is the rouble in trouble in 2023?

Fortress (t)rouble?

Roll back to 7 March and USD/RUB hit 154 as more Russian tanks pushed towards Kyiv in a full-scale assault against its neighbour.

The Bank of Russia rushed to throw up a safety net under the currency, supported by a formidable war chest of gold and FX reserves, even if much of these were progressively frozen by the West.

And now? USD/RUB at around 72.08 is 17.5% higher over the last month and more than 0.50% up in the last day. The Western $60 price cap on Russian oil, which landed 5 December, is starting to bite. Russia’s export income is again under pressure. 

Reuters has reported that Russian oil exports slumped 11% between 1 and 20 December. 

It also means the rouble has lost its top spot as the world’s best-performing currency – to the Brazilian real.

FX strategist and finance consultant at Keirstone, Francis Fabrizi 

  • USD/RUB is attempting to break above the 73.000 resistance level this morning. “If price breaks and holds above this level, it is likely 75.500 will be the next target.” 
  • “If 73.000 remains a strong resistance, I believe price will be pushed back down towards 69.000. Looking at the weekly timeframe, price is in a bullish trend following the ascending trend line trajectory.” 
  • “A break below 60.000 will indicate a bearish reversal. I anticipate price will show some weakness this week due to buyers taking profits however I feel this pair will remain bullish overall.”

A new global energy belligerence – Putin vs the West

  • By forcing through an energy price cap Western governments have pushed down the price of Russia’s most valuable export. 
  • Russian oil is now heading east to China and India, helped by discounting. It’s a more fractured, politically driven energy market.
  • The issue isn’t about just a price embargo – it’s a longterm downgrading of energy and tech investment in Russia. 


Most FX strategists warn the RUB’s on-screen value isn’t an accurate reflection of supply and demand. Sanctions against Russia means it’s harder for Russia to buy imports, which means a bigger trade surplus. In turn, this is also rouble-supportive.

But at the most basic governance level, the rouble is an unorthodox, high risk trade. 


203.84 Price
+0.350% 1D Chg, %
Long position overnight fee 0.0101%
Short position overnight fee -0.0183%
Overnight fee time 21:00 (UTC)
Spread 0.040


0.67 Price
-0.110% 1D Chg, %
Long position overnight fee -0.0065%
Short position overnight fee -0.0017%
Overnight fee time 21:00 (UTC)
Spread 0.00006


157.22 Price
+0.680% 1D Chg, %
Long position overnight fee 0.0106%
Short position overnight fee -0.0188%
Overnight fee time 21:00 (UTC)
Spread 0.010


1.09 Price
-0.260% 1D Chg, %
Long position overnight fee -0.0087%
Short position overnight fee 0.0005%
Overnight fee time 21:00 (UTC)
Spread 0.00006

Basic demand for RUB – where?

RUB worries are compounded by the long term impact of the European oil cap move: Russia’s economy is expected to contract 3% in 2023 as oil and gas sales to Europe plummet and military spending increases to finance Russia’s Ukraine war.

As OIL Price reported this morning, Russia’s finance minister admits the European energy price cap move will mean a budget deficit hit. This was also admitted by the Bank of Russia this month.

At the edges, Russian inflation is starting to build. Many reservists have been pulled from their current jobs and labour shortages are on the rise. 

The US dollar’s strength is intertwined with a stand-alone legal system which Russia simply doesn’t have.

Yuan you’re ready – greenback vs redback

Russia is thought to be looking hard at buying yuan on the fx markets in a move to cut its ties to USD dependency and circumvent the old export routes and sanction risks.

However that move will likely depend on oil and gas revenues. Moscow is keen to seek a counterweight to the dollar hegemony. 

It’s thought the USD/RUB pair took around 80% of the Moscow Exchange in January, yet this had sunk to around half this amount by autumn, Reuters reported in November. The yuan’s share of the Russian currency market had soared to 40% compared to less than 1%.

But the bigger question for 2023 is associational and RUB-sensitive: what is the advantage of association with a depleted Russia? The political-military consequences appear poor. 

Around 1.30pm DXY was 0.21% lower at 103.81 while EUR/USD was 0.33% higher at 1.0656; GBP/USD had lifted 0.15% to 1.2053; USD/JPY was 0.71% dow at 133.30.

Markets in this article

1.09107 USD
-0.00282 -0.260%
1.29649 USD
-0.00438 -0.340%
US Dollar Index
103.666 USD
0.339 +0.330%
157.220 USD
1.055 +0.680%

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