USD/RUB refreshes weekly low around 59.00 even as G7 eyes caps on Russian oil prices

• USD/RUB remains pressured around intraday low, down for the second consecutive day.
• IEA’s Birol hopes G7 plan to impose restrictions on Russian oil prices gets buy-in from several countries.
• Russia’s oil-for-ruble scheme defends RUB bulls despite the US dollar’s broad strength.

USD/RUB sellers attack 59.00 threshold during the second daily fall amid early Tuesday morning in Europe.

The Russian ruble (RUB) pair part ways from portraying the broad US dollar strength amid Russia’s strategic move on oil prices. However, global concerns surrounding the caps to restrict energy quotes from Moscow and risk-aversion woes appear to challenge the pair sellers of late.

Recently, International Energy Agency (IEA) Chief Fatih Birol said, per Reuters, “Hopes the G7 plan to impose price caps on Russian oil gets "buy-in" from several countries.” The diplomat also added that any price caps on Russian oil should include refined products.

Elsewhere, the record US inflation expectations, per the NY Fed’s survey of one-year-ahead consumer inflation expectations join fears of China’s nationwide covid lockdown, after fresh activity restrictions on Henan Province’s Wugang, appear to weigh on the market sentiment.

The risk-off mood underpins the US dollar’s safe-haven demand. That said, the US Dollar Index (DXY) refreshed its 20-year high earlier in Asia before retreating from 108.50.

It’s worth noting, however, that the cautious mood ahead of Wednesday’s US Consumer Price Index for June, expected 8.8% versus 8.6% prior, also challenge USD/RUB prices.

In addition to the US inflation numbers, the global rush towards more sanctions on Russia should also be watched carefully for short-term USD/RUB directions.

Technical analysis

The 21-DMA surrounding 57.35 holds the key to the USD/RUB downturn. Until then, buyers stay hopeful to consolidate the yearly losses from March’s high of 155.00.