Forex Market: USD/RUB plunges to a three-week low as focus sets on Putin-Macron meeting, Bank of Russia policy decision

USD/RUB registered a fresh three-week low on Monday, as the Russian currency was underpinned by rising Brent oil prices ahead of the highly anticipated meeting between President Vladimir Putin and his French counterpart Emmanuel Macron.

Macron is expected to visit Moscow today after holding talks over the weekend with US President Joe Biden in a “coordination logic” ahead of talks with Russia’s President.

The White House said that Macron and Biden discussed “ongoing diplomatic and deterrence efforts in response to Russia’s continued military build-up on Ukraine’s borders.”

In January, USD/RUB climbed to a 15-month high on concerns that Russia was preparing an invasion of neighboring Ukraine, which led to threats of new sanctions against Moscow by Western nations.

Also on investors’ radar is the upcoming policy decision by the Bank of Russia on Friday. The central bank is largely expected to hike interest rates from the current 8.50% level in an attempt to curb persistently high inflation in the country.

Higher interest rates support the domestic currency as they bolster foreign investors’ interest in Russian assets.

The rouble-based MOEX stock index was edging up 0.47% to 3,487.42 on Monday, while rebounding from a one-week low of 3,446.65.

Brent crude oil, a global benchmark for Russia’s main export, was edging down 0.11% on Monday to $92.64 per barrel, but still remained near a fresh 88-month high of $93.96 registered earlier in the session.

As of 10:41 GMT on Monday USD/RUB was edging down 0.39% to trade at 75.5411. Earlier in the trading session the Forex pair slipped as low as 75.5131, which has been its weakest level since January 13th (74.4713). The exotic currency pair has retreated 2.52% so far in February, following a 3.65% gain in January.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – 76.0032
R1 – 76.3461
R2 – 76.8537
R3 – 77.1966
R4 – 77.5395

S1 – 75.4956
S2 – 75.1527
S3 – 74.6451
S4 – 74.1375