Will The Russian Ruble Continue As The Fastest Growing Currency For 2017?

Since the Financial Times reported that the Russian ruble was the fastest growing currency in developing countries at the bottom of 2016 quite a lot has changed.

Some of the changes, mostly negative, include:

- The price of a barrel of Brent oil declining almost 20%. Oil produces a great deal of revenue for the Russian Federation, but they are by no means a banana republic.

- Russia has been constantly villainized by the American media to the point where Vladimir Putin, President of the Russian Federation, compared the scenario to antisemitism. This type of negative attention most certainly makes investors, and potential investors, fear the safe return of capital as they are under constant threat of American sanctions.

- Tensions continue to rise between Russia and the west, with NATO in Eastern Europe and with close encounters in Syria.

These changes have been creating a dark could over the way that Russia is perceived by the west, but not necessarily reflecting the reality of the situation. The reality of the situation is that it over the long term it is necessary for the west to normalise relations with the Russian Federation.

1 out of every 5 homes in America is powered by nuclear energy. Russia controls, directly or indirectly, approximately 60% of the world's uranium production along with the facilities to enrich the product as well. Uranium is necessary to create nuclear energy. Canada controls approximately 20% of production. Recently the Chinese government has approached Fission Uranium, a Canadian company, which has recently made the largest shallow discovery of uranium to date in the Athabasca basin. The Chinese have purchased a 20% stake in the company and have secured the rights to a portion of the production with options to increase their share of production. With future Canadian uranium production spoken for, there are only so many places to find these resources without mending fences.

There are many potential positive catalysts that will propel the Russian ruble higher. Uranium is only one aspect of the argument for the west to normalise relations with Russia.