Yesterday, RUB posted a remarkable performance, easily moving below the 50.00 level first thing in the morning. The strong performance of the crude oil market underpinned the risk appetite in the Russian FX market. Additionally, global geopolitics looked favourable. Hence, in the end, RUB closed at 49.32 against USD, gaining 1.3% over the session. Meanwhile, Brent closed 0.7% in the red, as it stumbled down to USD 65.8/bbl after peaking at USD 67.2/bbl in the evening.
The EM FX index firmed 0.6%, supported by TRY and ZAR performance, which rose 1.2% and 1.5%, respectively. At the same time, BRL corrected down 0.7%, followed by KRW, which fell 0.4%. Commodity-based currencies traded in line with RUB, firming 1.4-1.7% vs. USD. The tax period begins on Friday, which could provide additional support to RUB, but, if the correction in commodity markets continues, it would outweigh the technicalities.