RUB: weaker amid low trading activity
Yesterday, trading volumes in USDRUB equalled only USD 2.9bn, markedly below daily average figures, as many market participants were off for Columbus Day in the US. Meanwhile, RUB lost 0.3% against USD (40.50) and 0.5% vs. BASKET (45.36). Therefore, the CBR has shifted the operational band for the BASKET up 10 kopeks. RUB traded on a softer footing from the morning, while other EM currencies gained ground in the middle of the day. Hence, the EM FX index bounced from Friday’s dip and closed 0.5-0.6% firmer against USD. Specifically, ZAR and TRY strengthened 0.7-0.8%, while BRL was up 1.5%. In addition, commodity-based currencies put on a decent performance as well, with NOK up 0.7%, whilst AUD and NZD closed 1.0% in the black vs. USD. The price of Brent crude was trending lower (-1.5% on Monday at USD 88.3/bbl), and this was one of the determining factors behind yesterday’s RUB performance. However, given the low trading flow yesterday, we think market participants had to chase what looks to be the only meaningful FX offer from the CBR. Therefore, we think technical factors were no less important than crude oil yesterday. Meanwhile, we highlight that RUB’s performance gap against the EM FX index has widened to almost 17% YTD.
Maxim Korovin, Tatyana Zueva
VTB Capital analyst
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