RUB started the session on a stronger footing, hovering in a narrow range of 67.3-67.7 against USD. The oil market provided support, as Brent flirted with USD 50/bbl. However, crude lost momentum in the afternoon, spoiling risk sentiment on the Russian FX market. With the opening of the US markets, the pressure on oil mounted, so Brent declined to USD 47.6/bbl (-3.9%) by the close, losing all the gains of the previous session. Accordingly, RUB followed oil, but this time it looked a bit more resilient, slipping only 0.9% and closing at 68.55 against USD. That comes as no surprise, given that RUB had markedly underperformed oil’s dynamics, but we believe that room for upside in RUB remains, assuming oil consolidates near USD 50/bbl.
Nevertheless, RUB continued to lag EM FX peers. Commodity-based currencies closed flat in general, with only NZD and NGN rising 0.8% and 0.5%, respectively. The EM FX universe traded mixed: TRY fell 0.8%, followed by ZAR (-0.5%), while BRL and KRW ended the session 1.0% in the black.