USD/RUB teases bulls near 106.00 as US eyes more Russian sanctions, bond losses deepen
|- USD/RUB remains sidelined after the previous day’s downbeat performance.
- Biden administration to extend Moscow crackdown on Thursday, NATO allies also search for China-Russia ties.
- Mixed sentiment over oil demand from Europe and optimism over future talks challenge the upside potential.
- Fed’s Powell, second-tier US data may entertain traders ahead of the key Thursday.
USD/RUB upside seems in the offing as bears struggle around 106.00 during Wednesday’s Asian session.
Expectations of further hardships for the Russian ruble (RUB), especially from the US and the North Atlantic Treaty Organization (NATO), seem to lure the pair buyers. Also challenging the USD/RUB sellers is the multi-month high US Treasury yields.
In addition to the Biden Administration’s preparations to sanction over 300 Russian lawmakers, the latest chatters suggesting the US readiness to seize Moscow’s gold with the Treasury hint at further RUB weakness. On the same line is criticism of the divide inside the European Union (EU) while taking punitive actions against Russia, mainly due to their reliance on Moscow’s oil, which in turn could push the bloc leaders towards further actions to criticize the Ukraine invasion.
Elsewhere, Bloomberg said, “Global bond losses deepen to 11% from 2021 high, most on record,” which in turn underpins the US Treasury yields and favors the greenback buyers.
Alternatively, Russia’s ability to pay two Eurobond coupons and avoid default speculations joins its membership to NATO and a friendship with China that might help the nation to defend itself on Thursday’s key meeting.
In addition to the NATO meeting and geopolitical updates, today’s speech from Fed Chair Jerome Powell will also be important to watch for near-term directions.
Technical analysis
USD/RUB remains elusive unless crossing the 21-DMA level surrounding 110.85. However, the 100.0 threshold and the latest swing low near 96.00 appear tough nuts to crack for the bears.
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