USD/RUB dribbles around 135.00 as Russia’s plan to reopen stock trading battles Ukraine fears
- USD/RUB prints mild gains during the third consecutive weekly upside, sidelined of late.
- Russian central bank, MOEX discuss ways to restart equity trading next week.
- Mixed updates over Russia-Ukraine crisis, failed peace talks and monetary policy normalization elsewhere favor bulls.
- US data, UN Security Council and war updates will be crucial for near-term directions.
USD/RUB defends weekly gains around 134.50, up 075% intraday heading into Friday’s European session.
The Russian ruble (RUB) recently struggles for a clear direction as hopes of share market restart battles with geopolitical tensions with Ukraine and the West, not to forget easy oil prices of late.
Recently, Reuters came out with the news saying, “US President Joe Biden on Friday will call for an end of normal trade relations with Russia and clear the way for increased tariffs on Russian imports, per a source familiar with the situation.” On the same line were headlines suggesting Russia’s request for an emergency United Nations (UN) Security Council meeting to discuss the usage of chemical or biological weapons in the Ukraine war. Furthermore, headlines suggesting Moscow’s fresh airstrikes in Western Ukraine also weigh on the market sentiment and underpin the USD/RUB upside, due to the US dollar’s safe-haven status.
It’s worth noting that the recently downbeat oil prices also favor the quote due to being Russia’s key export earner.
On the other hand, news suggesting that the Bank of Russia and Moscow Stock Exchange (MOEX) are in talks to restart stock trading the next week seems to cap the USD/RUB upside. Also, negative for the pair could be the consolidation in the US dollar’s gains amid anxiety over the Fed’s next moves.
On Thursday, the US Consumer Price Index (CPI) refreshed its 40-year high while matching the 7.9% YoY forecast for February, which in turn propelled calls for a faster rate hike by the Fed. That said, CME’s FedWatch Tool flash 94% probabilities of 50 basis points of a rate-hike March.
Looking forward, geopolitical headlines will be important catalysts and can recall the buyers should the risk-off mood escalate. Further, the US Michigan Consumer Sentiment Index for March, expected 61.3 versus 62.8, will decorate the calendar.
Technical analysis
USD/RUB battles with the on-week-long descending resistance line during early Friday. Given the quote’s recent positive performance, mainly due to the Russia-Ukraine crisis, coupled with the sustained trading above 200-SMA and 50-SMA, USD/RUB buyers are likely to overcome the immediate hurdle surrounding 136.00.
Alternatively, an ascending support line from March 02, near 122.50 restricts the USD/RUB pair’s immediate downside ahead of the 50-SMA level of 121.75.