Ella 
USD/RUB gained momentum during early European trading on Monday, closing higher for a third consecutive week. The pair is currently trading around 97.23, up 0.37% on the day.
Economic data released last week showed that Russia’s S&P Global Manufacturing Purchasing Managers’ Index (PMI) in August was 52.7, higher than market expectations of 52.1. The data rose to its highest level in three months. The unemployment rate fell to a record low of 3.0% in July from 3.1% in June and market expectations of 3.2%.
The Russian ruble has fallen sharply in recent months and Russia’s budget has come under pressure from the conflict in Ukraine. Russia’s central bank raised interest rates by 350 basis points to 12% on August 15 in an effort to stem the ruble’s decline. In addition, as the cost of the conflict in Ukraine continues to rise and Moscow’s finances are increasingly strained, Russia has raised its military spending target to more than $100 billion in 2023, accounting for one-third of the country’s total expenditure.
Nonetheless, Russian Finance Minister Anton Siluanov predicts that the Russian economy will grow by at least 2.5% in 2023, with inflation hovering around 6%. He also said that he would work with the central bank to take all necessary measures to reduce inflation to sustainable levels.
On the U.S. dollar, market players are speculating that the Federal Reserve will be less aggressive after last week’s mixed economic data. The chance that the Fed will keep rates on hold at its September meeting remains at 93%, according to the CME FedWatch Tool. Meanwhile, the chance of a rate hike at the November meeting is about 38%. Still, Fed Chairman Jerome Powell said at a Jackson Hole symposium that potential additional rate hikes would depend on the data received.
Looking ahead, market participants will focus on U.S. factory orders data later on Tuesday before turning their focus to U.S. ISM Services PMI data on Wednesday. These data will provide direction for USD/RUB. Additionally, headlines surrounding the Russia-Ukraine war remain in focus.
