What Russia did do? Can it continue in this way?
Russian Ruble regained almost all of its losses seen after it attacked Ukraine. Earlier today, when the Moscow stock exchange opened, the Russian Ruble gained 6.8% and was seen at 74.12 (The strongest level since Feb. 11) against US Dollar, before giving back 2% to trade at 75.78.
And now the question is, why while sanctions are increasing and tensions in Ukraine are still high, and we do not have any specific signal from peace talk that can tell us we are close to ending this story, and even, on the contrary, tensions increasing, new sanctions every day and more restricts seen in past days for Russian individual, still, Russian ruble getting stronger? Let's make this question even harder. In past days US dollar demand was increasing, and DXY last night touched 99.77 after Hawkish FED minutes, which means that the USD Ruble chart was supposed to be bullish (It was bearish with the strengthening of the ruble).
The technical USDRUB chart is oversold. Since RSI in the H1 chart has started to flatten out, we can say that it started a return signal to balance itself.
But this return was the result of three important decisions made by the Russian central bank and governments.
1- At the very beginning, the central bank in Russia, increased the rates by 20%. In long term it is not good, however, in short term, it always works and helps the currency nominal rate to be stable.
2- While Russia was edging closer to a potential default on its international debt, it started to pay the profit of its dollar bonds in Rubble, emphasizing that it would continue to be the same, as long as, its foreign exchange reserves were blocked by sanctions.
3- As Russia announced earlier in March, from the beginning of April, they started to sell Oil and Gas in Russian Ruble, instead of the Dollar and Euro.
These factors helped the Ruble to recover. At the same time, the United States and European countries, announced new rounds of sanctions, targeting Russian financial institutions, as well as Kremlin officials and their family members.
