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.

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).

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD holding above 1.18 ahead of critical US data

EUR/USD is holding onto its gains, trading above 1.18 as the dollar remains on the back foot. ADP's US job report and the ISM Non-Manufacturing PMI provide critical clues toward the Non-Farm Payrolls. Fiscal stimulus talks and geopolitics are also in play.


XAU/USD bulls unstoppable, renews life-time highs near $2040

With ‘buy the dips’ emerging as the main underlying theme behind the gold (XAU/USD) price action so far this week, the bulls flex their muscles further to record fresh all-time highs near $2040.

Gold News

GBP/USD trades around to 1.31 amid dollar weakness, ahead of data

GBP/USD is trading around 1.31, recovering as the dollar retreats. The UK government is under scrutiny for its management of the virus crisis. Services PMIs on both sides of the Atlantic are eyed.


Forex Today: Gold smashes $2,000, dollar depressed, two Non-Farm Payrolls hints eyed

Stocks, bonds, and precious metals are on the rise while the greenback is falling alongside falling yields. Investors are eyeing slow progress in fiscal stimulus talks and top-tier US figures ahead of the Non-Farm Payrolls.

Read more

WTI hits fresh two-week highs near $42.50 ahead of EIA data

WTI (futures on Nymex) extends its winning-streak into the third straight day on Wednesday, as the bulls challenge the July high of $42.51.

Oil News