USD/RUB challenges weekly highs near 63.50 ahead of NFP

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  • USD/RUB moves higher and tests the 63.60 area.
  • Russian central bank expected to cut rates further.
  • US Non-farm Payrolls next on the calendar.

The Russian Ruble is depreciating further at the end of the week and is now helping USD/RUB to reach the upper end of the weekly range in the 63.50/60 band.

USD/RUB up on renewed USD-buying

Spot is up for the second session in a row today, managing to pick up extra steam on the back of fresh buying orders flowing into the greenback, which in turn remains supported by rising US yields.

RUB is also seeing some profit taking after clinching fresh highs vs. the buck in late June around the mid-62.00s, area last visited in July 2018.

In addition, further selling pressure came in after CBR’s Governor E.Nabiulina advocated for further rate cuts albeit by small steps earlier in the week. In addition, Nabiulina said the central bank should be fulfilling its easing cycle at some point in mid-2020.

In the docket, the most relevant event today will be the release of US Non-farm Payrolls for the month of June. In Russia we will see inflation figures seconded by the Consumer Confidence gauge during the April-June period.

What to look for around RUB

Upcoming inflation figures could confirm the underlying downtrend in consumer prices. In addition, healthy economic fundamentals stay supportive of the now dovish stance from the CBR, which is expected to keep the easing cycle unchanged for the time being. In the meantime, rising appetite for Russian assets, carry-trade, expected higher oil prices, record-high speculative positioning and diminishing chances of US sanctions against the country are all sustaining the positive prospects around RUB.

USD/RUB levels to watch

At the moment the pair is advancing 0.03% at 63.49 and faces the next hurdle at 63.66 (high Jul.3) seconded by 64.38 (55-day SMA) and then 65.78 (monthly high Jun.3). On the flip side, a breach of 63.18 (10-day SMA) would open the door for 62.49 (2019 low Jun.25) and finally 61.63 (monthly low Jul.11 2018).

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