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2 Dec 2014
RUB sees a sharp sell-off in response to oil – BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of Global Market Research at Bank of Tokyo-Mitsubishi UFJ, notes that RUB is essentially responding to the crude oil price fall as USD/RUB pair trades 21.5% higher from the November 24th intraday low.
Key Quotes
“USD/RUB is 21.5% higher from the intra-day low on 24th November, essentially responding to the 17% drop in crude oil prices over the same period. Yesterday saw another large move, the largest drop since 1998, with speculation in the market that intervention took place to support the rouble.”
“Under a free-float regime it is clear that there is little that can done when crude oil falls sharply. The rouble is rebounding today in line with the recovery in crude oil prices from yesterday’s low and as long as the authorities see the rouble responding to crude oil price developments, intervention is much less likely.”
“Inflation will become an increasing problem and under the new monetary policy regime it will be down to the central bank to try and limit upward inflation pressures. A deep recession now seems likely – the government assumed flat growth in 2015, but based on a crude oil price of USD 95 per
barrel.”
“The rouble remains vulnerable over the short-term due to risks to crude oil prices, but given our positive global macro view next year, especially for the US and China, we expect crude oil prices to stabilise, which will help reduce rouble downside risks ahead.”
Key Quotes
“USD/RUB is 21.5% higher from the intra-day low on 24th November, essentially responding to the 17% drop in crude oil prices over the same period. Yesterday saw another large move, the largest drop since 1998, with speculation in the market that intervention took place to support the rouble.”
“Under a free-float regime it is clear that there is little that can done when crude oil falls sharply. The rouble is rebounding today in line with the recovery in crude oil prices from yesterday’s low and as long as the authorities see the rouble responding to crude oil price developments, intervention is much less likely.”
“Inflation will become an increasing problem and under the new monetary policy regime it will be down to the central bank to try and limit upward inflation pressures. A deep recession now seems likely – the government assumed flat growth in 2015, but based on a crude oil price of USD 95 per
barrel.”
“The rouble remains vulnerable over the short-term due to risks to crude oil prices, but given our positive global macro view next year, especially for the US and China, we expect crude oil prices to stabilise, which will help reduce rouble downside risks ahead.”