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USD/RUB Pauses for Breath at 65.00, Bucking USD Strength

RUSSIA
  • USD/RUB BGN trades +0.07% higher this morning with price action holding above 65.00.
  • The cross was mostly unaffected by yesterday’s aggressive retracement of the post-FOMC USD weakness, but has seen downside momentum slow slightly.
  • W/w the RUB has gained 9.19% against the greenback with passthrough to inflation continuing to moderate.
  • WoW CPI figures will be interesting to gauge this afternoon as the delayed effects of the stronger RUB begin to reflect in high frequency figures.
  • Sell-side forecasts see the CBR having space to reduce the key rate an additional 200bps at the next meeting to the 12% and reach 9% by 2023.
  • 65.00 support is holding for now, with the weekly low at 62.30 being the next downside target should the level give way.
  • On the conflict front, negotiations remain stalled and Russia’s assault on Mariupol continues with the aim of confirming the establishment of the Land Bridge – which can be framed as a victory for Putin at home on May 9th.
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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