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  • The Russian currency gathers extra pace following the CBR meeting.
  • The pair challenges 2-week lows near 67.50.
  • The Russian central bank (CBR) raised rates by 25 bps to 7.50%.

The Russian Ruble is extending the weekly upside and is now forcing USD/RUB to test fresh weekly lows in the mid-67.00s in the wake of the CBR meeting.

USD/RUB weaker on CBR hike

Spot has accelerated the leg lower after the Russian central bank (CBR) raised the key rate by 25 bps to 7.50% at today’s meeting, somewhat catching markets off guard as consensus was pointing to a steady stance from the CBR.

The CBR justified the move higher in rates after assessing that inflationary risks remain on the upside due to uncertainty overseas and is now expecting consumer prices to raise 5-5.5% in 2019 and return to around 4% in 2020.

The central bank also sees the economy expanding at an annualized 1.9% in Q2, matching the bank’s line between 1.5%-2.0%.

In the meantime, spot is losing ground for the fourth session in a row following the better tone in the EM FX space, the recent CBR decision and the broad-based selling bias hitting the buck.

USD/RUB levels to watch

At the moment the pair is losing 0.87% at 67.65 and a break below 67.32 (low Aug.21) would aim for 66.25 (low Aug.15) and finally 65.44 (55-day SMA). On the other hand, the next up barrier aligns at 68.21 (21-day SMA) seconded by 68.85 (10-day SMA) and then 70.58 (2018 high Sep.10).

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