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USD/RUB Pulls Back From 3-Month Low as $ Volatility Holds

RUSSIA
  • USD/RUB opens higher on a firmer greenback this morning after testing key support at 72.6566 to make a new 3-month low in yesterday's session.
  • Early weakness in oil markets brought on by demand-side concerns in Europe (Feb road fuel consumption -10.8%) was somewhat offset by a dip in API inventories of -1m bbls vs expectations for a 3m bbl build.
  • Analysts note a narrower weekly draw being a signal of returning US capacity after the Texas Freeze.
  • USD/RUB still remains on the precipice of a larger move lower, with the sell side still confident in the RUB's cheap relative valuation vs oil prices & other high-beta EM FX.
  • Moves higher towards 74.00 on UST yield volatility will likely be seen as fading opportunities, but uncertainty over a harsh sanctions response from the UK & UK is an ever-present tail risk to note.
  • Focus today is on the Fed meeting and follow through in US Treasury volatility.
  • Additionally upside prints in PPI and weekly CPI should reinforce the need for reactive CBR hikes in April/June.
  • Intraday Sup1: 72.9534, Sup2: 72.5433, Res1: 73.4212, Res2: 73.7368
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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