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USD/RUB Flirts with 200dma as Oil Weakness, $ Strength Offsets CBR Tightening

RUSSIA
  • USD/RUB trades + 0.29% higher this morning, in line with a firmer BBDXY. Brent regained some composure overnight after moving through the July 20 low at $66.91 to fall just short of $65 support in yesterday's session.
  • Brent trades +0.31% this morning, but still looks vulnerable to more near-term downside, given fragile risk sentiment and a cloudier demand outlook.
  • $63.89 is the next key support to monitor.
  • Risk-off remains the dominant theme in markets right now, bolstering USD strength in the near-term as we go into the weekend.
  • Domestic focus will be on the Putin-Merkel meeting for discussion on Ukraine, Belarus & Afghanistan for headline risks – however, we're not expecting any major pressure on Moscow from Berlin, given the severe gas shortages affecting Europe.
  • Russia has shown willingness to continue to transit gas through Ukraine, so any pressure on that front will be nothing new.
  • USD/RUB trades a fraction above the 200dma, with a move above being a bullish technical near-term development, while a close below would be bearish.
  • Weakness in oil and USD strength continues to overshadow optimism in RUB assets on falling inflation and tightening from the CBR.
  • Intraday Sup1: 74.1011, Sup2: 73.8435, Res1: 74.6125, Res2: 74.7580
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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