Russian Ruble extends gains after emergency rate hike, markets brace for Fed Minutes

• Russian Ruble stays pressured for third consecutive day, extends pullback from multi-month high marked on Monday.
• Central Bank of Russian Federation announced 3.5% rate hike to lift the benchmark rates to 12%.
• Cautious optimism, US Dollar’s retreat weigh on USD/RUB.
• Geopolitical concerns, softer Oil price also challenge Russia Ruble buyers ahead of FOMC Minutes.

Russian Ruble cheers the broad US Dollar to stretch the previous day’s gains, triggered mainly by the Central Bank of Russian Federation’s (CBR) emergency rate hike, as market players prepare for the Federal Open Market Committee’s (FOMC) latest Monetary Policy Meeting Minutes on early Wednesday. Adding strength to the USD/RUB pair’s pullback moves could be the cautious optimism in the market, as well as an absence of major data/events from Russia and the Russian policymakers’ optimism contrasts with the mixed bias of the Fed officials.

Russian Ruble cheers hawkish surprise from CBR

On Tuesday, the Central Bank of the Russian Federation (CBR) called an emergency monetary policy meeting and lifted the benchmark rates by 350 basis points (bps) to 12.0%. That said, the CBR’s latest move could be a reaction to an article published in TASS holding the central bank’s easy-money policy responsible for the Russia Ruble’s slump past 102.00 during the early week. It’s worth noting that the CBR lifted the benchmark rates by 1.0% in July.

Despite the CBR’s rate hike, the Russian Ruble remains on the bear’s radar as an ongoing war with Ukraine takes a toll on the oil-rich nation. Furthermore, the international sanctions due to the tension with Kyiv also stop the nation’s revenue from main earner Oil and put a floor under the USD/RUB price.

On the other hand, the US Dollar Index (DXY) prints mild losses around 103.10 while retreating from a five-month-old descending resistance line, as well as from the highest level in a month. In doing so, the Greenback’s gauge versus the six major currencies prints the first daily loss, so far, in five amid the slightly positive sentiment.

Elsewhere, the three-day downtrend in the WTI crude oil, currently down 0.62% intraday near $80.10, also challenges the USD/RUB sellers. Furthermore, the chatters surrounding the likely extension of the Russia-Ukraine war and the anticipated economic toll on Moscow also keep the Russia Ruble sellers hopeful. Additionally, Tuesday’s upbeat US Retail Sales and hawkish comments from Minneapolis Federal Reserve President Neel Kashkari challenged the pair bears the previous day, activating a bounce off the lowest level in a week.

Above all, the CBR’s stark hawkish move versus a likely policy pivot at the Fed may favor the Russian Ruble buyers should today’s FOMC Minutes hesitate to confirm rate hikes.

Russia Ruble Technical Analysis

Russian Ruble buyers need validation from an ascending trend line from May 31, close to 94.20 by the press time, to retake control. Until then, the USD/RUB bulls remain hopeful of revisiting the late March 2022 swing high of around 107.75.