Yesterday, the Russian FX market made a remarkable move, supported by the U-turn in oil dynamics. The opening was weak: USDRUB scratched 64.70 in the first trading minutes, and looked as though it would go further north over the rest of the session. However, moderate liquidity contained further RUB weakening, with the latter consolidating in the 64.2-64.5 range.
In the evening, the oil market bounced, likely encouraged by the growth in China’s crude imports (4.1% MoM and 29.3% YoY), so Brent surged, closing at to USD 50.4/bbl (+3.7%). RUB immediately followed oil, first breaking through 64.00 against USD and then firming to 62.95 by the close likely driven among other things by the triggered stop-losses in the relatively illiquid market. We believe that RUB has more room to appreciate, if Brent stays around the USD 50/bbl level. In that case, we see a fair USDRUB level at 61.0.