USD/RUB holds above 94.60, markets turn cautious ahead of Fed’s Powell

• USD/RUB holds above 94.70 amid the USD demand.
• Russian President Vladimir Putin said that BRICS members will consider shifting trade away from USD.
• Traders will closely watch Fed Chairman Jerome Powell's Speech.

Russian Ruble(RUB) hovers around 94.65, the lowest value against the dollar since March 2022. Markets turn cautious ahead of the Federal Reserve (Fed) Chairman Jerome Powell Speaks at the Jackson Hole Symposium later in the day. Meanwhile, the US Dollar Index (DXY) surges above the 104.20 mark.

Russian President Vladimir Putin stated earlier in the week that the days of the US dollar dominating commerce among the BRICS nations are numbered. Putin added that members will consider shifting trade away from USD and towards national currencies, with the BRICS New Development Bank playing an important role.

Despite this, Russia's budget is under pressure as a result of the Ukraine conflict, and the central bank raised interest rates last week to stop the decline of the Ruble. That said, the Bank of Russia increased the interest rate by 350 basis points (bps) to reach 12%. Apart from this, Russia has increased its military spending objective for 2023 to more than $100 billion, representing a third of all state expenditure, as the escalating costs of the Ukraine conflict place an increasing strain on Moscow's finances.

On the US Dollar front, Boston Fed President Susan Collins said that further rate rises are possible and that sending a strong signal regarding the timing of rate cuts is premature. Philadelphia Fed President Patrick Harker stated that the central bank has probably done enough with restrictive monetary policy. He also said that he believes the Fed will remain interest rate stable this year, but that next year would depend on the data. If Fed Chairman Powell offers hawkish comments at the Jackson Hole Symposium, this could boost the Greenback against the Russian Ruble.

Moving on, market participants will monitor Fed Chairman Jerome Powell's Speech. The event could offer hints about further monetary policy and give a clear direction for USD/RUB. Also, the headline surrounding Russia’s war in Ukraine remains in focus.