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USD/RUB Pauses For Breath at 74.50 as Major Military Drills Begin

RUSSIA
  • USD/RUB trades +0.04% higher this morning, diverging slightly from early selling pressure in the BBDXY.
  • The cross closed -0.39% lower yesterday, pulling back from 74.50 support towards the end of the session.
  • Focus is on Lavrov-Truss talks and Normandy format discussions over the Minsk process for progress on Ukraine after Macron’s meetings seemingly delivered a renewed sense of calm.
  • Nevertheless, Russian and Ukrainian military drills kick off today and will be monitored closely by all sides.
  • RUB has recovered 7.08% since the peak in USD/RUB at 80.4115, supported by a thawing in tensions and robust underlying macro fundamentals.
  • Market consensus remains for a 100bp hike at tomorrow’s CBR, but a case can be made for a smaller +75bp hike if the CBR has sufficient confidence in its forecasts for a near-term peak in CPI on base effects in Feb.
  • Intraday Sup1: 74.504, Sup2: 74.266, Res1: 75.148, Res2: 75.5827
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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