RUB falls behind the market amid Syrian headlines
Friday's session in the EM FX universe kicked off on a positive note, with across the board profit-taking on USD longs. Thus, RUB opened at 33.44 against USD and 38.14 vs. BASKET. However, by midday, RUBBASK slipped to 38.10, though USDRUB remained trapped near 33.45. Flow-wise, trading in the first half of the day was almost nothing. Publication of the worse than expected US payroll report cheered the market. In particular, USDRUB quickly dropped to 33.25-33.30, where locals started actively showing bids. Nevertheless, USDRUB was 33.32, while BASKET had slipped to 38.06 by the end of the day. Hence, for the whole Friday's session, RUB gained 0.2% vs. BASKET and 0.35% vs. USD. Meanwhile, RUB’s EM FX peers firmed on average 0.8-1.1% against USD, while commodity-based currencies advanced 0.7%. Apparently, headlines that Russia might take military action if there are attacks on Syria halted the post-NFP RUB rally. Swings in global risk sentiment are to remain key drivers for RUB this week; the CBR's monetary policy meeting on Friday will be as important for the FX market.
Maxim Korovin, Anton Nikitin
VTB Capital analyst
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