USD/RUB fades part of the recent strength and retests 83.00

• USD/RUB fades the spike to the 90.00 region recorded on Thursday.
• Focus remains largely on the Russian invasion of Ukraine.
• The MOEX Index rebounds sharply following Thursday’s collapse.

The Russian ruble regains part of the ground lost on Thursday and now drags USD/RUB to the vicinity of the 83.00 region at the end of the week.

USD/RUB looks to geopolitics

After clinching all-time highs around 90.00 soon after Russia started its attack on Ukraine, USD/RUB sparked a corrective downside and managed to close Thursday’s session around 84.30.

The move lower in the pair came in response to FX intervention by the Bank of Russia, which decided to step in to prevent a potential collapse of the currency and stabilize the situation in the financial markets. In addition, the central bank banned short sales in the exchange and OTC markets.

Furthermore, Russian stocks measured by the MOEX index opened Friday’s session with important gains – nearly 17% at the time of writing – therefore trimming part of the sharp pullback witnessed on the onset of the invasion.

In the domestic cash markets, yields of the 10y benchmark bond drop to the 12.60% region following Thursday’s bull run to the 14.00% zone, an area last traded back in January 2015.

It seems both RUB and Russian equities so far manage to weather quite well the recent sanctions by the EU, the UK and the US.

USD/RUB levels to watch

So far, the pair is losing 0.65% at 83.82 and faces the next hurdle at 86.43 (high Feb.25) followed by 90.00 (all-time high Feb.23) and then 100.00 (round level). On the downside, a breach of 80.41 (monthly high Jan.26) would aim for 76.18 (55-day SMA) and finally 74.25 (monthly low Feb.10).