USD/RUB renews record top near 140.00 as Moody’s cites Russia default risk on Ukraine conflict

• USD/RUB extends previous two-week uptrend to renews all-time high.
• Moody’s cut Russia rating to Ca amid rise in default risk.
• Fears of the Western ban on import of Moscow’s oil, no ceasefire fears underpin rubble weakness of late.
• Russian central bank contrasts Fed, US CPI eyed for near-term direction but risk catalysts are the key.

USD/RUB remains on the front foot around an all-time high of 138.50, up for the third consecutive week, as market players expect further hardships for the Russian ruble amid geopolitical tussles with Ukraine.

That said, the quote’s latest upside takes clues from Moody’s downgrade of Russia’s credit rating to Ca on Sunday, the second-lowest rung of its rating ladder, per Reuters. The rating agency cited, “Severe concerns around Russia's willingness and ability to pay its debt obligations,” as the key catalyst for the latest rating cut.

“On Sunday, the central bank said Russian creditors and those from countries that had not joined in with sanctioning the country would be paid in roubles at the exchange rate prevailing at the time of payment,” said Reuters. The news also adds, “Moody's said default risks had increased, and that foreign bondholders were likely to recoup only part of their investment.”

Elsewhere, Bloomberg said that the US weighs acting without allies on the ban of Russian oil imports whereas UK Defense Chief Admiral Sir Tony Radakin signaled further casualties in Kyiv. The Army leader believed, per The Times, “Russia could ‘turn up the violence’ with ‘more indiscriminate killing and more indiscriminate violence’ in response to resistance.”

Amid these plays, the US dollar and the bonds cheer market’s rush to risk-safety while the S&P 500 Futures drop around 1.5%.

It’s worth noting that Friday’s firmer prints of US jobs report for February and hawkish comments from Chicago Fed President and FOMC member Charles Evans also underpin USD strength and propel the USD/RUB prices.

That said, USD/RUB bulls will keep their eyes on the risk catalysts for fresh impulse while this week’s US Consumer Price Index (CPI) data for February will act as an extra directive for the pair traders to watch.

Technical analysis

USD/RUB bulls flirt with fire as prices print fresh high despite the overbought RSI conditions, which in turn hints at risk of heavy fall should the quote witness slightly positive news. Even so, bears remain cautious until the quote drops below the previous record high around 86.00, marked during January 2016.