17 Jul 2014
RUB underperforms on fresh sanctions against Russia - TD Securities
FXStreet (Łódź) - Cristian Maggio, Head of Emerging Markets Research at TD Securities suggests that the action taken yesterday by the EU and the US against Russia, due to its involvement in destabilizing the situation in Ukraine, explains the large underperformance of the RUB against all other currencies today.
Key quotes
"USD/RUB is already +1.26% on the day and moving quicker than we can track while writing this note."
"At around 34.88, the pair is moving north and will likely breach the 35.0 mark soon."
"We also continue to see RUB weakness in the remainder of the year and into 2015. We forecast USD/RUB at 35.80 by quarter-end and 36.75 by year-end, and see the pair grinding higher to 39.30 by end-2015."
"As a consequence, inflation and broader financial stability will continue to be a serious issue for the CBR, which led us to believe that more emergency tightening will be required down the line."
"We still expect the CBR to hike the 1w repo rate to 10% this year. And although the 250bp that are still missing look very aggressive at the moment, monetary tightening will become inevitable if the situation doesn't de-escalate quickly enough."
Key quotes
"USD/RUB is already +1.26% on the day and moving quicker than we can track while writing this note."
"At around 34.88, the pair is moving north and will likely breach the 35.0 mark soon."
"We also continue to see RUB weakness in the remainder of the year and into 2015. We forecast USD/RUB at 35.80 by quarter-end and 36.75 by year-end, and see the pair grinding higher to 39.30 by end-2015."
"As a consequence, inflation and broader financial stability will continue to be a serious issue for the CBR, which led us to believe that more emergency tightening will be required down the line."
"We still expect the CBR to hike the 1w repo rate to 10% this year. And although the 250bp that are still missing look very aggressive at the moment, monetary tightening will become inevitable if the situation doesn't de-escalate quickly enough."