Ruble: the Beginning of the fall or correction

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The Russian currency on Monday actively take positions. At the opening of trading the pair USDRUB is trading at 66.28, adding 2 pennies since the beginning of the day and 63 kopecks per day. EURRUB is at 75.84, showing an increase of 11 cents since the start of the session, plus 69 cents for 24 hours. Statements of the Central Bank last week to launch the pending purchases of foreign currency fell on fertile soil, as the ruble was vulnerable to profit-taking after a 5% rally since the beginning of the year.
The pressure was lifted and a reversal to the decline in the key markets after weak reports of the American companies.
In addition, before oil fell below $60 per barrel of Brent, which was an additional negative factor. Thus, movement of markets can be called moderate. Still most of the players maintain a wait before a succession of important events. The dynamics of the current markets can also be attributed to the unwillingness to update the local extrema before the release of such statistics, as the key rate US Nonfarm Payrolls.
Right now the focus is on assessment of trade negotiations between the US and China: the former came to America for convergence. Potentially, news about what had made progress in talks that could restore demand for risky assets, supporting the ruble. In this case, the USD / RUB pair will once again go below 66, testing the lows. However, we can hardly consider this as a baseline scenario, but rather as a pleasant surprise.
At the moment, the higher the chances that the parties will not hand over the positions, and hence the rapprochement of the parties, we will not see. In these circumstances, the demand for risky assets could wane, and the pressure on the ruble to strengthen by launching a new wave of growth USDRUB, up to 70.
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Alexander Kuptsikevich,
Analyst
FxPro