- The Russian currency stays bid in the vicinity of the 64.00 mark.
- The pair navigates levels last seen in August 2018.
- Russia’s Retail Sales, jobless rate due later in the day.
The Russian currency is prolonging the upbeat mood on Wednesday, relegating USD/RUB to the area of multi-month lows near 64.00 the figure.
USD/RUB looks to data, CBR
The pair has resumed the downside today following yesterday’s indecisive performance, always trading close to the critical support at the 64.00 milestone.
RUB regained some upside traction this week following auspicious results from the Russian industrial sector and the uptick in producer prices, all amidst the offered mood greenback and the constructive sentiment in the EM FX universe.
Looking ahead, the Federal Reserve is expected to leave the Fed Funds target at 2.25%-2.50%, although the focus of attention will gyrate around the ‘dots plot’ and the balance sheet.
In Russia, Retail Sales and the unemployment rate is also scheduled ahead of the key CBR meeting on Friday.
What to look for around RUB
The ongoing moderate trend in inflation figure plus the economy expanding above estimates could prevent the CBR from hiking rates further in the near/medium term. The central bank sees inflation picking up pace in the next months, although consumer prices should drift to the bank’s 4% target at some point in H1 2020. That said, it appears the ‘pause mode’ in the CBR could be in place for longer than expected. Furthermore, the carry-trade remains supportive of RUB along with expected higher oil prices (despite RUB seems to have decoupled from oil dynamics as of late). On the negative side, the spectre of further sanctions on Russian citizens or the economy as well as geopolitical jitters carries the potential to undermine occasional upside momentum in RUB.
USD/RUB levels to watch
At the moment the pair is retreating 0.09% at 64.31 and faces the next support at 64.13 (2019 low Mar.18) followed by 62.73 (200-week SMA) and finally 61.63 (monthly low Jul.10 2018). On the other hand, a breakout of 65.52 (21-day SMA) would open the door to 66.50 (high Mar.8) and then 67.16 (high Feb.14).
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