- USD/RUB remains on the defensive near 64.30.
- RUB appreciation remains well in place so far.
- Russia GDP, Producer Prices, Industrial Production next on tap.
The Russian Ruble is extending its upbeat momentum so far this week and is now taking USD/RUB to the area of 64.30, or 2-month lows.
USD/RUB looks to data
The solid pace around RUB remains well in place so far this week, extending the upside bias since June’s lows in the 65.80 region, down for the third consecutive week so far.
The generalized appetite for Russian assets keeps sustaining the upbeat sentiment surrounding the currency, while the now lower probability of US sanctions has been also underpinning the sentiment.
The improvement in RUB comes despite the Russian central bank (CBR) cut its key rate by 25 bps to 7.5% at its meeting last Friday, a decision largely anticipated by market participants however. The central bank has opened the door at the same time for further rate cuts in the next months, reaching the neutral rate (6%-7%) at some point in mid-2020. In addition, the CBR revised lower its end-of-year inflation forecast to 4.2%-4.7% and it now expects the economy to expand at an annualized 1.0%-1.5% this year.
Later in the session, the Russian docket looks interesting enough in light of the release of GDP figures during the January-March period, Industrial Production figures and Producer Prices.
What to look for around RUB
The ongoing down trend in inflation plus healthy economic fundamentals motivated the CBR to lower the key rate last week, hinting at the same time at the likeliness that further rate cuts remain well in on the table. 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 retreating 0.12% at 64.24 and a breakdown of 64.13 (monthly low Jun.17) would aim for 63.66 (monthly low Apr.23) and finally 61.61 (2019 low Mar. 20). On the other hand, the next hurdle is located at 64.72 (55-day SMA) seconded by 64.92 (100-day SMA) and then 65.59 (monthly high Jun.3).
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