USD/RUB flirts with daily lows near 69.30 post-CBR decision

USD/RUBB drops to fresh daily lows in the 69.30 region.
The Russian central bank (CBR) reduced rates by 100 bps.
The CBR left the door open for extra easing in the next meetings.

Pablo Piovano FXStreet

The Russian ruble is picking up extra pace on Friday and is now forcing USD/RUB to trade in the area of daily lows around 69.30.

USD/RUB weaker post-CBR decision

USD/RUB is trading in the lower bound of the weekly range on Friday, coming under extra selling pressure after the CBR reduced the key rate by 100 bps to 4.5% per annum.

The central bank justified its move in response to increasing disinflationary factors, which exceeded the bank’s estimates due to the restriction measures taken amidst the coronavirus pandemic.

The central bank expects the GDP to have contracted markedly during Q2 due to the lockdown measures, while it predicts a contraction of 4%-6% of the economy during the whole of the year and a recovery in 2021 and 2022.

In addition, the unremitting bullish stance around crude oil prices lifted the European benchmark Brent crude to fresh tops in levels just shy of the $43.00 mark per barrel earlier in the session, and it has also lent extra wings to RUB.

What to look for around RUB

The persistent slowdown in domestic consumer prices have been exacerbated by the restrictions imposed to fight the coronavirus pandemic and prompted the CBR to reduce its policy rate further south from the 6%-7% band, considered as the “neutral rate” by the bank. Brent dynamics and the gradual re-opening of the economy are expected to play a relevant role in determining the price action around the ruble in the next months, while extra easing remains on the card in order to keep inflation near the 4% target.

USD/RUB levels to watch

At the moment the pair is losing 0.85% at 69.27 and a drop below 68.03 (monthly low Jun.8) would aim for 67.38 (200-day SMA) and then 6529 (monthly low Mar.3). On the flip side, the next up barrier aligns at 70.54 (monthly high Jun.15) followed by 71.40 (100-day SMA) and then 72.43 (55-day SMA).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD stays well offered below 1.1800

The selling pressure on EUR/USD is picking up pace, with the pair slipping decisively below the key 1.1800 level and sliding to fresh two week lows as Wednesday’s session draws to a close. The move lower comes as the US Dollar finds renewed strength after the latest round of US data and the release of the FOMC Minutes. Next of note on the docket will be the US weekly Initial Jobless Claims.

GBP/USD reaches multi-day lows near 1.3500

GBP/USD reverses its initial upside momentum and is now adding to previous declines, approaching the 1.3500 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold battle to regain $5,000 continues

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs near the $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Bitcoin has found or is near a bottom, extended consolidation to follow: K33

Bitcoin (BTC) is nearing or has already established a bottom, which could be followed by a sustained period of slow price movement, according to K33.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.