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USD/RUB Continues to Flirt With its 200dma, CBR Hikes To Cushion RUB vs High-Beta Peers

RUSSIA
  • USD/RUB trades -0.11% lower this morning, hovering around the open as markets tread water ahead of tomorrow’s FOMC.
  • The cross continued to flirt with the 200dma, but managed to close below the level at 73.54.
  • Oil markets are holding a fraction higher this morning with an eye on API inventory data coming out this afternoon.
  • Putin will also be delivering a briefing on Russia’s coronavirus measures to tackle the spread of the Omicron variant today, while case numbers remain around the 30k/day mark on a declining trajectory.
  • Beyond this, markets will start to move in anticipation of a more hawkish Fed with expectations for a doubled taper speed and potentially more aggressive dot plot signalling 2-3 hikes in 2022.
  • This could inject some volatility into the USD side of EMFX this week, followed by the CBR meeting on Friday where markets are expecting the CBR to deliver +75-100bp in hikes (bbg consensus +100bp).
  • This should provide some support to the RUB and protection against potential USD strength relative to late-hiking high-beta peers, such as ZAR.
  • Intraday Sup1: 73.1560, Sup2: 72.8416, Res1: 73.6763, Res2: 73.7629
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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