Ella 
USD/RUB maintained a positive trend around 96.60 during early European trading on Thursday. The Bank of Russia’s interest rate decision on Friday will be in focus and could trigger USD/RUB volatility. Market players expect the Russian central bank to raise interest rates.
The Russian Ministry of Economic Development has raised its inflation forecast for this year from 5.3% to 7.5%, the TASS news agency quoted a document from the Russian Ministry of Economic Development as saying. The expected rise in Russia’s inflation rate came just hours after Putin addressed the country’s economy at the Eastern Economic Forum in Russia’s easternmost city of Vladivostok.
Russian President Vladimir Putin on Tuesday praised the central bank for keeping inflation under control with double-digit interest rates and said there were no insurmountable obstacles to limiting volatility in the Russian ruble.
Russian inflation accelerated in August to an annual rate of 5.15%, exceeding the 4% target, and analysts expect the central bank to raise interest rates again at a meeting on Friday, Reuters reported. Notably, Russia’s central bank raised interest rates by 350 basis points to 12% on August 15 in an effort to stem ruble depreciation and limit price increases.
In terms of the U.S. dollar, the market expects the Federal Reserve (FED) to keep interest rates unchanged at next week’s FOMC meeting. However, data suggests the Fed should be wary of rising inflation in the coming months. According to the CME Fedwatch tool, 97% of investors expect interest rates to remain unchanged at 5.25 to 5.50% in September. However, odds of a rate hike at the November meeting rose to 49.2%.
Looking ahead, traders will focus on weekly U.S. jobless claims data, producer price index (PPI) and monthly retail sales due later on Thursday. Attention will shift to the Bank of Russia’s interest rate decision. These data will provide direction for the USD/RUB trend. Additionally, headlines surrounding Russia’s war in Ukraine remain in focus.
