USD/RUB trades with modest losses above the 94.50 mark amid US Dollar weakness

• USD/RUB holds above the 94.50 area in the Asian session. 
• Russian President Vladimir Putin said that inflationary risks were increasing.
• Putin said Russia has surpassed Germany to become the world’s top five largest economies.
• Investors will monitor US PMI, the Federal Reserve (Fed) annual economic symposium at Jackson Hole.

USD/RUB trades with modest losses above the 94.50 mark after retreating from a 16-month high of 102.35 during the Asian session on Wednesday. Meanwhile, the US Dollar Index (DXY) loses some ground to 103.50 as markets turn cautious ahead of Jackson Hole Symposium and Federal Reserve (Fed) Chairman Jerome Powell Speaks on Thursday and Friday, respectively.

On Tuesday, Russian President Vladimir Putin stated that inflationary risks were increasing and he urged the government and the central bank to maintain stability. That said, a military operation in Ukraine has put a burden on Russia's budget, and the country's central bank had to raise interest rates last week to prevent the Ruble from collapsing. It’s worth noting that the Bank of Russia raised the interest rate by 350 basis points (bps) to 12% last week. 

Russia's government is dealing with the conflict with Ukraine, which has led to a rise in military purchases and a misallocation of funds. The current account surplus of Russia decreased by 85% in the first half of CY2023.

Furthermore, Vladimir Putin added that Russia has surpassed the Federal Republic of Germany to become one of the world's top five in terms of purchasing power parity and the size of the economy, according to Sputnik.

On the US Dollar front, investors raise their bets on additional rate hikes by the Federal Reserve (Fed) despite the robust labor data and weaker inflation data last week. Fed Chairman Jerome Powell Speaks on Friday will be a guide for investors and could provide insights into economic conditions. A hawkish tone might boost the Greenback and acts as a tailwind for USD/RUB.

Moving on, market participants will keep an eye on the headline surrounding Russia’s war in Ukraine. The US S&P Global PMI data will be released later in the North American session. Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday will be in the spotlight this week. Traders will take cues from the data and find opportunities around USD/RUB.