RUB appreciates a tad vs. the buck around the 62.00 area.
Spot comes down after testing fresh multi-month peaks near 65.00.
US sanctions, geopolitical risks remain key for RUB.
After visiting fresh peaks in the 65.00 neighbourhood last week, USD/RUB has picked up some downside traction and returned to the current 62.00 area on Monday.
USD/RUB focused on sanctions, geopolitics
RUB has been under increasing selling pressure as of late, dropping to lows in the 65.00 zone vs. the buck during last week, levels last traded in November 2016.
In fact, the imposition of further US sanctions against the country earlier in the month (and the likeliness of extra sanctions in the next days) plus heightened geopolitical tensions in the Middle East involving Syria has complicated the scenario for the Ruble, exposing it to an increasing selling bias and practically ignoring the rally in crude oil prices. It is worth mentioning that the barrel of the European reference Brent crude rose to multi-year peaks just beyond the $73.00 mark per barrel during last week.
Further out, the CBR is likely to cut rates further – as inflation continues to run well below the bank’s 4% target – although RUB could find some stabilization in the second half of the year, banning an escalation of tensions in the Middle East.
News from the speculative community saw RUB net longs at the lowest level since November 21 2017 in the week ended on April 10, as per the latest CFTC report.
USD/RUB levels to watch
At the moment the pair is up 0.17% at 62.12 and a break above 63.89 (high Apr.10) would aim for 65.01 (2018 high Apr.11) and finally 65.49 (high Nov.29 2016). On the other hand, the next support aligns at 61.25 (low Apr.13) seconded by 60.33 (10-week sma) and then 58.21 (200-day sma).