What is EUR/RUB?
The EUR/RUB currency pair indicates the exchange rate between the euro (EUR), the currency of many European countries, and the Russian ruble (RUB), Russia's official currency. The exchange rate between the two currencies indicates how many rubles are needed to purchase one euro.
The euro is a reserve currency that is used for international trade and is the official currency of the eurozone. The European Central Bank (ECB) oversees its administration and is responsible for maintaining price stability and ensuring the smooth operation of the euro currency.
The RUB is represented by the symbol "₽" and is subdivided into 100 kopeks. It is managed by the Russian Federation's central bank (commonly known as the Bank of Russia), which is responsible for preserving price stability and promoting long-term economic growth. To achieve these goals, the central bank employs various measures, such as setting key interest rates.
What affects the price of the EUR/RUB pair?
The price of EUR/RUB, or the exchange rate between the euro (EUR) and the Russian ruble (RUB), can be influenced by various economic and geopolitical factors. Here are some key factors that can impact the EUR/RUB exchange rate:
- Political and geopolitical events: International tensions such as armed conflict, elections, government policies, and trade disputes can affect the demand and supply dynamics of the currencies involved. Russia is one of the largest economies in Europe, but implications caused by large sanctions imposed by Western countries can threaten the economy and cause volatility in the EUR/RUB pair.
- Macroeconomic indicators: Economic factors such as Gross Domestic Product (GDP) growth, inflation rates, interest rates, and employment figures in both the Eurozone and Russia can have a significant impact on the exchange rate. Stronger economic performance in one currency zone relative to the other can lead to a stronger currency and potentially impact the exchange rate.
- Monetary policy: The monetary policies implemented by the ECB and the Bank of Russia can affect the EUR/RUB exchange rate. Changes in interest rates, quantitative easing programmes, and other monetary policy tools can influence investor sentiment and the relative attractiveness of the euro and the ruble.
- Commodity prices: Russia is a major exporter of commodities, including crude oil and natural gas. Fluctuations in commodity prices, particularly crude oil prices, can have an impact on the Russian economy and subsequently influence the ruble's exchange rate against the euro.
What to watch out for when trading EUR/RUB?
To trade the EUR/RUB pair, keep an eye on data releases and statements from influential organisations in the Eurozone, Russia, and individual members of the European Union (especially Germany and France, Europe's two largest economies), such as:
- Organization of the Petroleum Exporting Countries (OPEC) announcements could affect oil prices and the Russian ruble
- ECB monetary policy announcements such as increases in interest rates
- Bank of Russia monetary policy announcements
- Eurozone and Russia Consumer Price Index (CPI) growth
- Eurozone and Russia Trade Balance. The trade balance measures the difference in value between imported and exported goods and services over the reported period. It could be supportive (bullish) for the euro, for example, if the reading is stronger than the forecast, while a reading weaker than the forecast is bearish (negative) for the EUR
- GDP growth in Russia and the Euro area