Yesterday, the Russian FX market traded the Moscow session on a softer footing, settling on a downward trend right from the morning. By the end of the session, RUB was quoted at 54.22 against USD, surrendering 0.8% to the opening levels. Interestingly, RUB continued to trade apart from oil, which started the day with a 1.4% bounce. Later, oil lost ground, with Brent dropping sharply to USD 60.5/bbl. However, in the evening the non-event FOMC meeting spurred risk appetite, providing momentum for a bounce. Brent recovered to USD 61.5/bbl, but remained 1.0% in the red against the previous close. RUB regained its positions, firming to 53.64 (+0.3%) against USD. The EM FX index rose 0.6%, driven by BRL and TRY, which gained 1.0%, while MXN and ZAR advanced 0.9%.
The FOMC statement, published last night, featured no change in policy (as the markets expected) but acknowledged the improvement in the US economy. With less slack in the economy and growing evidence of some pick-up in inflation pressures, the market remains focused on a rate move at the 17 September FOMC meeting (despite advice from the IMF and World Bank to delay rate hikes until early 2016).