- USD/RUB loses further ground and tests 64.30.
- CBR cut the repo rate by 25 bps to 7.5%.
- The CBR now sees end-of-2019 CPI at 4.2%-4.7%.
The Russian Ruble keeps appreciating vs. the greenback this week and is now dragging USD/RUB to fresh 3-week lows in the 64.30 region.
USD/RUB weaker on CBR decision
Spot has accelerated the leg lower this week after the Russian central bank (CBR) cut its key rate by 25 bps to 7.50% at today’s monetary policy meeting, matching the broad consensus.
In addition, the central bank has revised lower its end-of-year inflation forecast to the 4.2%-4.7% range (from 4.7%-5.2%) after assessing that upside risks to inflation now appear somewhat mitigated.
Furthermore, the CBR said the annual raise in consumer prices keeps losing traction, while inflation expectations among households and business price expectations remain elevated.
The CBR also sees the likeliness of further easing (via rate cuts) at one of the next meetings if domestic developments follow the bank’s forecasts, paving the way to a neutral monetary stance until mid-2020.
From its medium-term forecasts also published today, the CBR now expects the economy to expand at 1.0%-1.5% this year and 1.8%-2.3% in 2020 (baseline scenario) and 1.0%-1.5% in 2019 and 2.0%-2.5% next year in case of higher oil prices.
USD/RUB levels to watch
At the moment the pair is retreating 0.36% at 64.32 and a breakdown of 64.12 (monthly low May 22) would aim for 63.66 (monthly low Apr.23) and finally 64.39 (monthly low Mar. 20). On the other hand, the next hurdle is located at 64.71 (55-day SMA) seconded by 64.96 (100-day SMA) and then 65.59 (monthly high Jun.3).
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD trades with negative bias, holds above 1.0700 as traders await US PCE Price Index
EUR/USD edges lower during the Asian session on Friday and moves away from a two-week high, around the 1.0740 area touched the previous day. Spot prices trade around the 1.0725-1.0720 region and remain at the mercy of the US Dollar price dynamics ahead of the crucial US data.
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus
Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.