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Survey: Oil to Drive Ruble Price in 2017

The biggest issue facing the Russian ruble in 2017 is the price of oil, according to a Bloomberg survey of FX executives released today.

Of those polled, the majority (or 51%), say oil prices will have the biggest effect on the currency, with 83% of the executives saying that they feel that the ruble will be more correlated to oil than emerging markets currencies this year.

Of less concern in relation to the ruble were Russian Central Bank policies and geopolitics, which only 22% said they were concerned about, and just 5% of respondents said that they are concerned about US interest rate hikes.

The biggest challenge facing Russian FX professionals in 2017 is managing currency exposures, according to 41% of those polled. This is in comparison to 21% that cited market structure changes as a major concern, 15% that said they are worried about hedging against market volatility, 15% that expressed consternation about navigating geopolitical challenges, and 9% that said they are concerned about being able to reduce their operations costs.

“The ruble regained some of the ground it lost over the last three years as oil prices firmed,” says Tod Van Name, Bloomberg’s global head of electronic trading for FX and commodities. “We brought the leaders of the Moscow FX community together to hear their thoughts and share the latest technology and industry best practices.”

When asked where they believe the ruble will be at the end of 2017, 48% of Bloomberg’s survey audience said that they anticipate the RUB will remain between 55 and 60. Another 38% say the ruble will range from 60 to 65, while 12% say it will go below 55.

The poll also showed that 46% of Russian FX professionals have increased their hedging of the ruble, while 22% are naturally hedged and are not adjusting their strategy this year. 

The rest do not have the tools to hedge (15%), cannot hedge against the ruble weakness because it is too expensive (12%) or simply choose not to hedge (5 %).

The survey was taken from more than 85 FX analysts, traders and technology professionals who attended Bloomberg’s FX17 summit in Moscow last week.

Galen Stops

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