USD/RUB testing fresh tops around 58.40 on CBR

• RUB depreciates further post-CBR.
• Spot navigates in fresh 2-week peaks.
• Softer Brent is also weighing on RUB.

The Russian currency is losing further ground at the end of the week and is now lifting USD/RUB to the area of daily highs in the 58.35/40 band.

USD/RUB higher on CBR, Brent, looks to US data

The pair keeps the upbeat tone and extending the rally for the second consecutive week so far, today gaining extra buying interest after the Russian central bank (CBR) lowered its key rate by 25 bp to 8.25%, matching the broad consensus and in line with previous comments from officials.

The CBR noted domestic inflation keeps hovering over the 4% target and that the downside pressure in consumer prices are due to temporary factors, all amidst elevated inflation expectations.

The central bank expects the decline in inflation expectations to become more sustainable and consistent in the next periods, while it sees consumer prices ending the year around 3%.

Regarding the economic activity, the CBR stressed the GDP stays in line with the bank’s projection, the recovery in consumption becomes steadier and the unemployment level is far from affecting inflation.

RUB is also deriving weakness from the softer tone in prices of the barrel of Brent crude, currently trading just above the $59.00 handle, posting smalls for the day so far.

USD/RUB levels to watch

At the moment the pair is up 0.94% at 58.39 and a break above 58.66 (100-day sma) would aim for 58.57 (high Sep.28) and finally 58.89 (high Aug.30). On the other hand, the next support is located at 58.16 (200-day sma) followed by 57.85 (low Oct.27) and then 57.60 (21-day sma).