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USD/RUB Flirts With the 75.00 Handle as the CBR Meeting Approaches

RUSSIA
  • USD/RUB trades -0.09% lower this morning, mirroring early selling pressure on the BBDXY to return back below the 75.00 handle.
  • The cross found support at 75.50 yesterday as Lavrov’s talks with UK’s Truss ended on a notably frosty note with Russia sounding frustrated over the UK’s unwillingness to consider its position.
  • Lavrov warned that a unified EU/NATO response to its concerns would likely see talks collapse – resulting in marginal RUB weakness into the end of the session supported by a firmer USD post-CPI.
  • For now, tensions remain elevated with military drills going on until Feb 20. The CBR is expected to raise rates +75-100bp today, with market consensus in favour of a larger step to tame still proinflationary conditions in January.
  • 3x6 FRA-Mosprime Spreads have lifted back to +110bp this morning ahead of the meeting. A 100bp step is unlikely to see much change in RUB, while a +75bp hike may see RUB weaken if not complemented with appropriately hawkish forward guidance.
  • Intraday Sup1: 74.266, Sup2: 74.0639, Res1: 75.5827, Res2: 76.015, Res3: 76.537
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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