EUROPEAN FX UPDATE: Rouble hits record low post-‘invasion’ and pre-intervention

Analysis details (10:08)

RUB

Although the broader risk rout and safety flight has abated to an extent, Russia’s special military operation under the guise of demilitarising Ukraine rumbles on and the Rouble would arguably have plunged to an even deeper all time low against the Dollar without action from the CBR to try and ‘stabilise the situation’. As things stand, Usd/Rub almost touched 90.0000 before paring back, while Russian stock indices were in freefall until the Bank suspended short-selling. However, sentiment remains decidedly bearish and extremely volatile as headlines break and markets brace for the retaliatory response from Western nations via stronger sanctions and further measures in support of Ukraine.

DXY/JPY/XAU

When push really comes to shove, or in this case an escalation of hostilities and heightened geopolitical concerns, traditional safe havens rally irrespective of almost any other factors, so it’s no surprise that the Greenback is bid alongside the Yen and Gold. The index extended its rebound from recent lows to 96.969 and is only facing headwinds from Usd/Jpy within the basket as the headline pair retreated through 115.00 to a sub-114.50 low before bouncing. Similarly, Xau/Usd cleared Usd 1900/oz more convincingly and is now scaling the half round number above after getting to within a Buck or so at the first attempt and stalling.

CHF/EUR/CAD/GBP/AUD/NZD

Amidst a sea of red relative to their US rival, the Franc is faring better than other majors due to its safety credentials, as Usd/Chf is capped above 0.9200 and Eur/Chf as a better gauge of the overall mood remains under 1.0350 between 1.0292-1.0380 parameters. Meanwhile, the Euro is struggling to retain 1.1200+ status and may be reliant on decent option expiry interest from the figure up to 1.1210 (1.65 bn) for assistance, the Loonie is below 1.2800 regardless of WTI extending already huge advances to touch Usd 99/brl, Sterling is under 1.3450, the Aussie is back under 0.7200 and Kiwi teetering over 0.6700 having topped 0.6800 only yesterday in wake of the hawkish RBNZ hike.

SCANDI/EM

In keeping with the Cad and other oil-fired currencies like the Mxn,and Rub of course, the Nok is hardly gleaning any traction from Brent’s charge beyond the century mark, but the Cnh and Cny are both benefiting from their regional standing as ports in a storm, not to mention a growing stature in the global reserve ranks.

24 Feb 2022 - 10:08- Research Sheet- Source: newsquawk