- USD/RUB has retreated from 118.10 but is likely to move north again on risk-off impulse.
- The comments from Biden’s SOTU speech on Russia’s isolation have added more worries for the ruble.
- Fed is well prepared to raise interest rates swiftly to contain soaring inflation.
The USD/RUB pair has rallied like there is no tomorrow in the past few trading sessions. The major has slipped from Tuesday’s high of 118.10, which seems more a repulsive selling rather than a reversal. It is likely that the major will start a fresh rally as the speech from US President Joe Biden in the State of the Union (SOTU) speech has added more worries for the Russian ruble.
The US President Joe Biden in his first SOTU speech has confirmed that Russia is now isolated from the world. This has happened after the restrictions on Russia’s SWIFT international banking system. Moreover, the sanctions on technology imports in Moscow have crippled their military equipment and logistics. Adding to that, Biden has also banned Russian flights from using the US airspace.
Apart from that, the Ukrainian military and civilians are resisting the escalation of Russia’s dominance in the ongoing invasion of Ukraine. Therefore, the collaboration of Ukraine’s repulsion, sanctions on Russia and Western leaders, and weaponry aid to Ukraine by the nations are aiming at Russia’s downfall.
Meanwhile, the US dollar index (DXY) is trading at the rooftop and is expected to extend its gains further on risk-off impulse. The statement from US President Joe Biden in the SOTU speech that mentioned the Federal Reserve (Fed) is prepared to move swiftly in the coming months to raise interest rates, making money more expensive to borrow and spend as per The New York Times, is likely to advance the greenback further.