Russian Ruble rebound fades below 94.00 amid geopolitical, central bank woes

• Russian Ruble pares the first weekly gain in five amid cautious mood ahead of top-tier data/events.
• Central Bank of Russia’s (CBR) surprise rate hike fails to inspire USD/RUB bears amid firmer Greenback, yields.
• Looming rivalry between G7 and BRICS underpin corrective bounce of Russian Ruble pair.
• Monthly PMIs for August, central bankers’ speech at Jackson Hole eyed for clear directions.

Russian Ruble prints the first daily loss in five around 93.55 as it bounces off the three-week low marked the last Thursday heading into Monday’s European session. In doing so, the USD/RUB pair reverses the first weekly fall in five as the US Dollar regains upside momentum after pausing the Greenback bulls on Friday. It’s worth noting that the Central Bank of Russian Federation’s (CBR) surprise rate hike and cautious mood ahead of this week’s top-tier data/events fail to inspire Russian Ruble buyers, especially amid downbeat concerns about Russia and the global economy.

Russian Ruble stays weak despite CBR rate hike

USD/RUB recovers from a three-week low as market players consolidate the CBR-inflicted losses amid the cautious mood ahead of the August month Purchasing Managers Indexes (PMIs) and China news, as well as the top-tier central bankers’ speeches at the annual Jackson Hole Symposium event.

Also exerting downside pressure on the Russian Ruble are market chatters that the nation braces for more supply-chain actions to lift the struggling currency after the CBR’s heavy rate hike of 3.5% failed to keep the USD/RUB down for a long time.

Additionally, the Financial Times (FT) reported during the weekend that China indirectly pushes for competition with the Group of Seven (G7) nations while marking its presence at the BRICS meeting where officials from Brazil, Russia, India, China and South Africa spoke, signaled. Given the Sino-Russian ties, the Dragon Nation may gain support from Moscow for the proposed measures, which in turn can escalate the global trade wars and propel the US Dollar’s haven demand, especially amid the firmer US Treasury bond yields.

It should be noted that China’s failure to bolster market confidence via monetary and fiscal measures also puts a floor under the USD/RUB prices.

Against this backdrop, the US and European stock futures stay defensive while keeping the previous day’s rebound from the monthly lows while the US 10-year Treasury bond yields also reverse Friday’s retreat by rising back to 4.29% at the latest. With this, the US Dollar Index (DXY) seesaw around a 10-week high and exerts downside pressure on the Russian Rubble.

Moving on, the central bankers’ preference for policy pivot will be closely eyed at the Jackson Hole Symposium, which if confirmed could trigger the US Dollar’s pullback and may allow the Russian Ruble to defend the previous week’s rebound.

Russian Ruble Technical Analysis

Russian Ruble’s downside remains elusive unless the USD/RUB quote jumps back beyond the previous support line stretched from May 31, close to 94.80 at the latest.