Yesterday, RUB firmed 0.6% against USD, but only 0.3% against BASKET, as the non-event FOMC statement triggered EURUSD short covering. The FOMC noted that it saw the weakness in activity in 1Q15 as ‘transitory’ (real GDP was up only 0.2% annualised), while inflation is likely to go back up to 2%. The 8 May nonfarm payroll report is the likely decider for a June rate increase, though the consensus is still with September.
As the CBR’s meeting approaches, trading activity on the Russian FX market continued to decline, with the MICEX reporting USD 3.2bn of turnover yesterday. RUB opened flat against USD, and only the continuing uptick in oil prices managed to break its flattish trade pattern. Brent climbed to USD 63.7/bbl (+1.6%). USDRUB ended at 51.01; BASKET closed at 53.55.
The EM universe traded mixed yesterday. Asian currencies looked weak, with THB declining 0.6% and SGD slipping 0.2% against USD. At the same time, ZAR firmed 0.7%, followed by MXN, which closed 0.2% in the black. Commodity-based currencies remained on firmer ground: NOK advanced 1.5.