The emerging central bank interventions to prevent dangerous capital outflows are multiplying. Brazil started with an increase in the cost of money by 50 basis points on May 29th, which was followed on June 8th by the +25 bp in Indonesia. Also India has been moving in this direction, however preferring the direct intervention on the currency market in defense of the rupee.
On the emerging front, the behavior of the Russian ruble is intriguing us. There has been a clear bullish break against the dollar (UsdRub) that should bring the cross to 33.20 (now at 32.80) and this would not be nothing strange if it happened in a context of strengthening of the oil. As we can see from the graph, the two variables are always opposite to each other with drops of oil that coincide with a weakness of the ruble (on UsdRub) and vice versa. At the moment, the two indicators are uncorrelated and, considering that also the other currency measure that we use to predict the price of WTI, the cross AudNzd, is showing another issue, then we would not want the upward movement of the WTI in recent days to represent a nice trap for bulls (Graphic source: Bloomberg).
On the emerging front, the behavior of the Russian ruble is intriguing us. There has been a clear bullish break against the dollar (UsdRub) that should bring the cross to 33.20 (now at 32.80) and this would not be nothing strange if it happened in a context of strengthening of the oil. As we can see from the graph, the two variables are always opposite to each other with drops of oil that coincide with a weakness of the ruble (on UsdRub) and vice versa. At the moment, the two indicators are uncorrelated and, considering that also the other currency measure that we use to predict the price of WTI, the cross AudNzd, is showing another issue, then we would not want the upward movement of the WTI in recent days to represent a nice trap for bulls (Graphic source: Bloomberg).
Recommended Content
Editors’ Picks
EUR/USD retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.