RUB: in the black thanks to the CBR
Yesterday, RUB renewed its historical lows. Intraday volatility was quite high; in particular, USDRUB surged to 38.80, then touched 38.90 and slipped to 38.50 shortly thereafter. Meanwhile, Brent crude oil price has picked up around 1.0% to USD 97.50, while EM FX index gained 0.3-0.4% vs. USD. Moreover, MXN, BRL, TRY and ZAR ended 0.5-0.7% firmer against USD. In our view, this means that positioning in the market is fairly one way right now, while RUB’s weakening during the previous sessions happened on the back of rather light trading volumes. Hence, USDRUB is vulnerable to any potential changes in the risk sentiment and/or increased hard currency selling offers in the market. Regarding the latter, we highlight that exporters are to be selling FX already next week to meet the MET payment. Therefore, tactically and technically, RUB looks undervalued right now. However, late in the evening USDRUB slipped to 38.27 on the back of the CBR’s announcement of FX swap sell/buy operations. Hence, at the end of the day RUB firmed 0.15% against USD.
Maxim Korovin, Anton Nikitin
VTB Capital analyst
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