Dollar Outlook and Ruble Dynamics After US Elections

The market response to the US elections followed a familiar script. Uncertainty eased and the dollar firmed in futures trading while the ruble faced pressure near the 98 per dollar mark. Analysts noted this dynamic as the first wave of reactions settled into place.

The DXY index climbed to about 105 points, signaling broader dollar strength against the euro, yuan and yen. That move weighed on commodity prices and added pressure to the ruble. In the near term, a test of 98.5 rubles per dollar could occur, but markets were pricing in a forthcoming Federal Reserve rate cut of a quarter point with high confidence. Such a move would cool the dollar’s momentum and relieve some strain on commodities and the ruble, potentially allowing the ruble to rebound toward the 96–97 range.

A chief analyst at a major bank suggested that the election outcome could provide modest support to the dollar versus the ruble.

Analysts warned that while a win for a key US candidate could lift the dollar on the global stage, the policy path may tilt toward protectionism. Escalating trade frictions with China and possibly Europe could emerge, and if that happens, global growth may slow and inflation could rise due to higher import costs. Weaker global demand would tend to push down commodity prices, including oil, gas and metals, which would tend to weigh on ruble earnings from exports. In that scenario, the ruble could weaken faster against the dollar and recover more slowly against other currencies.

Forecasts indicated the ruble might soften more quickly against the dollar than against the yuan or the euro in the coming weeks.

Exporters typically curb the sale of foreign currency early in the month, which adds pressure on the ruble. Negative factors for the ruble also include softer oil prices and looser rules for the mandatory sale of exporters’ foreign currency earnings to the state.

Analysts noted that the ruble’s trade balance surplus would be supported by higher ruble interest rates and ongoing central bank operations, including currency interventions related to reserve management. The central bank raised the policy rate to around the teens and kept a cautious stance on liquidity, aiming to balance stability and growth.

Forecasts vary. One analyst suggested the dollar could trade in a broad band by year-end, around the mid to upper 90s per ruble, with the euro hovering in the same general vicinity and the yuan near 13–14 rubles. A different forecast cautioned that the dollar’s path would depend on global trade dynamics and domestic data, but a clear path to significantly lower levels was unlikely given regulatory and demand pressures. In the short run, the dollar could move roughly within a 97.5–102 ruble range.

Some observers note that the dollar’s influence could remain stronger than the euro or yuan in the coming quarters. A shift toward a less globalized economic stance could keep investors favoring dollar-based assets, particularly if US yields stay comparatively attractive.

Should I buy dollars?

Analysts caution that buying dollars remains a strategic decision shaded by sanctions and financial infrastructure risks. For Russians, the choice hinges on personal needs and risk tolerance. Cash dollars may still be practical for travel or short-term activity abroad.

Analysts urge consideration of several factors before buying dollars:

*Trading pauses on dollar and euro pairs on major exchanges have amplified ruble volatility since mid-year.

*Geopolitical risks remain a concern; unfriendly states may impose sanctions or freeze assets.

*Withdrawal limits apply to some dollar holdings, with certain accounts restricted to ruble withdrawals or caps on dollar withdrawals.

*Deposit rates on dollar and euro positions are relatively low compared with ruble yields in many local instruments.

*Holding cash in dollars and euros involves balancing risk and potential reward against other currencies and assets.

Some economists advise against loading up on dollars for the typical saver, pointing to modest gains in dollars versus inflation and better ruble deposit yields in recent cycles.

With inflation eroding real returns, the case for dollar investments has to be weighed against ruble-denominated opportunities that currently offer strong yields. If foreign currency exposure is pursued, choosing an exchange-traded yuan option or yuan-denominated bonds can be a practical route, and gold remains a dollar-priced hedge for diversification. A sensible approach for many savers is to hold foreign currency and instruments in a measured portion of savings, perhaps one-third to two-fifths, depending on spending patterns and risk appetite.

Forecasts point to a modest ruble softening over the next few quarters. By the end of 2025, the dollar could hover around the 106 ruble mark, the euro near 116 rubles and the yuan about 14.6 rubles. Some months, especially around the end of month tax periods, have historically seen exporters sell currency, which can create favorable windows for currency purchases if needed.