- USD/RUB loses further ground and breaks below 75.00.
- The Russian central bank (CBR) hiked rates by 50 bps.
- The CBR said inflationary pressures remain high.
The Russian ruble extends the upside momentum and drags USD/RUB to fresh multi-week lows in the sub-75.00 area on Friday.
USD/RUB weaker on hawkish CBR
USD/USD trades on the defensive for the third consecutive session at the end of the week. Spot saw its decline accelerated on Friday after the CBR surprised markets and hiked the key policy rate more than expected by 50 bps to 5.00%.
According to the central bank, the move was justified by the unabated inflationary pressures along with the steady pace of the recovery in the domestic demand, which is seen challenging the capacity of certain sectors.
Furthermore, the CBR left the door open to extra hikes in the next meetings, confirming its shift to a more aggressive stance to bring inflation to levels in line with the bank’s goal.
USD/RUB levels to watch
At the moment the pair is losing 0.68% at 74.90 and a breach of 74.68 (100-day SMA) would aim for 72.53 (2021 low Mar.16) and finally 70.00 (psychological level). On the flip side, the next up barrier emerges at 77.29 (weekly high Apr.21) followed by 78.57 (2021 high Apr.6) and then 80.00 (psychological level).
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