This paper is aimed to make a currency report. It will consider a pair of the US dollar and the Russian ruble. It is going to analyze their relations in the currency market, as well as provide a short, medium, and long-term prediction on their future exchange.
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The American and Russian economies are acknowledged to be the largest on the world financial stage. They are known to be connected by a currency pair of the US dollar and the Russian ruble. This currency pair is claimed to be exotic. However, when it comes to analysis, it tends to attract both professional traders and representatives of other segments who are connected with businesses in Russia (Stevenson 56).
The dynamics of the two currencies is stated to be affected by the correlation between the economies of the two countries. Their condition is expected to be influenced by a large number of various factors. That is why it is admitted that it proves to be rather difficult to predict how the relations between the dollar and the ruble might develop (Stevenson 84-85).
From a historical viewpoint, this combination has been demonstrating the chaotic character of the movement. Besides, it has been characterized by high levels of volatility and risks. The currency rate of Russian is acknowledged to be rather dependent on world prices for petroleum. Therefore, the US dollar is considered to be the most stable and secure currency in the world, whereas the Russian ruble appears to be sensitive to the volatility of prices in the petroleum market.
Thus, in the analysis of the pair, it is important to take into account the petroleum rates. Hence, it is possible to assume that the Russian ruble tends to grow and become more solid about the US dollar if the petroleum rates grow. However, if the cost of petroleum has become lower, the Russian ruble is likely to be challenged by an immediate fall. This is what has been witnessed over the past years. The Russian economy has been facing a certain crisis since the dramatic fall of prices for petroleum in 2016.
This crisis is accepted to be similar to that one of 2008. Therefore, the Russian economy has been in a state of recession. As for the American economy, after the elections, it has been witnessing the strengthening of the positions of its currency (Vishnevsky, “Prediction 2017” 94-95).
Despite the said above, the prognosis for the Russian ruble does not seem desperate. First, within a year the situation in the relations between the two currencies is not likely to change dramatically. Since a significant fall of 2016, the ruble has been trying to restore its status. The petroleum prognosis until the end of the year looks favorable for the Russian ruble to keep its positions at the index of 56 RUB/USD (Vishnevsky, “Prediction 2017” 98).
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To make a medium and long-term prognosis, it is necessary to analyze the petroleum market and reflect on the events which will take place in both of the countries. The petroleum prognosis is encouraging for Russia. Besides, the country is going to hold the elections. Therefore, within the next three years, the Russian ruble is expected to become more stable, whereas, within the next five years, it is supposed to maintain its stability (Vishnevsky, “Prediction 2018-2023”, 132). This prognosis is made based on the presupposition that no other wars are likely to start.
In conclusion, it is necessary to note that this paper has made a currency report. It has considered the pair of the US dollar and the Russian ruble. It has analyzed its relations in the currency market, as well as provided a short, medium, and long-term prediction on their future exchange.
Stevenson, Jack. Currency Reports. Oxford University Press, 2014.
Vishnevsky, Alexander. “USD/RUB Prediction: 2017.” Journal of the Russian Economy, vol. 13, no. 7, 2016, pp. 88-99.
Vishnevsky, Alexander. “USD/RUB prediction: 2018-2023.” Journal of the Russian Economy, vol. 13, no. 7, 2016, pp. 100-134.