The Russian Central Bank believes that the country’s economy will bounce back to pre-pandemic levels at the end of the year. Deputy Governor Alexei Zabotkin in his comments, also said that the monetary policy could become neutral once the economy regains potential. The bank is targeting a peak of 5.5% in inflation, which would exceed the 4% target the bank has set. This may raise market expectations of a rate hike in 2021 and promote further strengthening of the Ruble.
The USDRUB is up 0.47% as of the time of writing, as the pair aims to break a 2-day losing streak that follows a resumption of the downward correction earlier in the week.
Technical Levels to Watch
The USDRUB bounced off the lower boundary of the channel on the daily chart and met resistance at the 73.919 price level. A break of this level allows 74.52 to come into the picture. Continued recovery on the pair as it marches towards the opposing channel border will bring price into contention with barriers at 75.487 and 75.974, before 76.511 comes into play as the new target to the upside that coincides with the upper channel boundary.
On the flip side, resumption of the Ruble strength with rising crude oil prices allows the pair to retest the lower border of the channel. If this border gives way, then 72.802 comes into the picture as the immediate downside target. Below this area, 71.981 and 70.611 become additional targets.
USD/RUB Daily Chart