Yesterday, RUB firmed 0.2% against USD to end the session at 53.85 amid decent trading activity as MICEX reported USD 4.0bn in USDRUB turnover. The BASKET closed 0.9% in the black, as EURUSD dropped slightly below 1.12. During the day, USDRUB spiked to 54.65 as market participants were concerned by the uncertainty surrounding the Greek negotiations, while export was on the side lines. However, in the second half of the day, crude oil’s market rally (Brent ended almost 2.0% in black) prompted some profit-taking on long USDRUB positions.
The potential derailing of Greek debt talks weighed on EM currencies as well, pushing the EM FX index down 0.2%. ILS and IDR were the only bright spots, gaining 0.4% during the day, but their performance was outweighed by ZAR, which dropped 0.6%, as well as by TRY and BRL, which lost 0.5%. Today, the EU Summit is in focus: the market is looking for signs of a breakthrough.
As we have noted before, the bid for hard currency is getting stronger, and a 2.0% rebound on the oil market yesterday was instrumental only in bringing USDRUB back to the previous day’s closing levels. One-week FX repo remained unpopular, with only USD 18mn secured yesterday. Hence, the outstanding volume of FX repo is to amount to USD 32.8bn today.