- USD/RUB holds onto previous day’s bounce off 13-day low.
- Russian coupon payment update, cautious optimism in the market underpinned previous recovery.
- S&P cuts Russia’s credit rate, cites default fears.
- Bank of Russia is widely expected to keep benchmark interest rate unchanged at 20%.
USD/RUB stays defensive around 103.00 during Friday’s Asian session, keeping the previous day’s rebound from a two-week low in a tight range ahead of the Bank of Russia interest rate announcement.
The Russian ruble (RUB) pair rose the previous day amid mixed concerns over the Kyiv-Moscow peace talks. Also propelling the quote were the looming fears of Russia’s default.
No clear progress on the negotiations targeting a ceasefire in Kyiv keeps markets on tenterhooks despite the absence of a halt in talks favor optimists.
Recently, China’s Foreign Ministry confirmed that China and Russia met on March 17 to discuss security cooperation. Beijing previously denied the US allegations of readiness to help Moscow in the battle with Ukraine. Hence, the issue will be important and can add to the USD/RUB upside should it produce negative headlines during today’s call between US President Joe Biden and his Chinese counterpart Xi Jinping.
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Elsewhere, global rating giant S&P cut Russia’s credit rating from ‘CCC-‘ to ‘CC’ while citing the default fears, despite some on the floor confirmed receiving coupon payment due this week in the USD.
On a broader front, the US Treasury yields remain pressured and challenge the US dollar bulls while the S&P 500 Futures drop 0.70% intraday losses to portray the market’s dull mood by the press time.
Looking forward, the Bank of Russia isn’t expected to alter the benchmark rate of 20% but any surprises can’t be ruled out, which in turn could propel the USD/RUB prices. Additionally, Turkey is brokering a meeting between Russian President Putin and his Ukrainian counterpart Volodymyr Zelenskyy to discuss the 15-point peace plan in detail, which in turn keeps the markets hopeful and may weigh on the ruble pair.
Technical analysis
USD/RUB bulls need validation from the 21-DMA level surrounding 106.80 to reject the odds of a downside targeting the monthly support line, near 96.10 at the latest.
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