- Russian Rouble (RUB) holds steady after steep losses
- Russian central bank acts to stop RUB selloff
- US Dollar (USD) rises on safe haven flows
- US ISM manufacturing PMI, State of the Union address
The US Dollar Russian Rouble (USD/RUB) exchange rate is holding steady on Tuesday after strong gains in the previous session. The pair settled +14% higher yesterday at 94.60 after having risen as high as 120 earlier in the session, a record high. At 10:30 UTC, USD/RUB trades +2.3% at 96.80
The Russian Rouble has steadied today after a steep selloff in the previous session. The Russian central bank adopted emergency measures yesterday in an effort to manage the hit on the economy from Western sanctions.
The West took the decision to exclude some Russian banks from the SWIFT international payment system whilst also restricting the central bank’s access to foreign reserves.
In response to the sanctions, the Russian central bank raised interest rates to 20%, up from 9.5%, to compensate for the sharp decline in the Rouble, which could then spark high inflation. The actions by the central bank have stopped the fallout in the Rouble but they might be forced to act again in the coming days.
High level peace talks between Kiev and Moscow had failed to reach an agreement and lethal shelling of Ukraine continues suggesting that there is no end in sight.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.08% at the time of writing at 96.79 building on gains from the previous session.
The US dollar gained yesterday on safe haven flows after the West applied strong sanctions to Russia for invading Ukraine.
Today, Russia, Ukraine developments remain in focus. However, US data could also gather some attention. Firstly, analysts are expecting US ISM manufacturing ISM data to rise to 58 which would represent a 0.4 increase from January’s 57.6 reading. The level 50 marks the separation between expansion and contraction.
President Biden will give his State of the Union address later today. Any comments surrounding Russia, Ukraine could drive the US dollar.
