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  • USD/RUB retreats from weekly tops near 64.00 (Monday).
  • Russia inflation figures came in below estimates in June.
  • Trade Balance figures next on the docket on Friday.

The Russian currency is alternating gains with losses vs. the greenback in an apathetic day, driving USD/RUB to the 63.70 region.

USD/RUB met resistance at 64.00

The lack of a clear direction in spot remains well in place so far this week, trading just below weekly highs in the 64.00 neighbourhood recorded on Monday.

RUB has already digested June’s inflation figures published on Monday, which showed consumer prices rose at an annualized 4.7% (from 5.1%) and came in flat from a month earlier.

Later in the week, the usual weekly report of FX Reserves held by the CBR coming up on Thursday followed by Trade Balance figures on Friday. on the US docket, all eyes will be on Powell’s testimony and the FOMC minutes on Wednesday ahead of CPI data on Thursday.

What to look for around RUB

Declining inflation appears supportive of the easing cycle already triggered by the central bank, while Governor Nabiulina expects the economy to reach neutral rates at some point in mid-2020. Furthermore, healthy economic fundamentals and the increasing demand for domestic debt (OFZ) have been sustaining the rising appetite for Russian assets. Additionally, RUB derives extra buying interest from the carry-trade, expected higher oil prices, record-high speculative positioning and diminishing chances of US sanctions against the country.

USD/RUB levels to watch

At the moment the pair is advancing 0.08% at 63.73 and faces the next hurdle at 63.99 (high Jul.8) seconded by 64.30 (55-day SMA) and then 65.78 (monthly high Jun.3). On the flip side, a breach of 63.39 (21-day SMA) would open the door for 62.49 (2019 low Jun.25) and finally 61.63 (monthly low Jul.11 2018).