Forex Market: USD/RUB touches fresh one-month lows as Russia sanction threat wanes

The Russian ruble advanced for a fourth day to touch the strongest level in more than a month against the US dollar, after US and European leaders urged Russia to de-escalate the crisis in Ukraine.

USD/RUB touched a session low at 35.333 at 06:15 GMT, after which the pair trimmed losses to trade at 35.438 at 14:45 GMT, losing 0.19% for the day. Support was likely to be received at February 18th low, 35.169, while resistance was to be met at March 25th high, 36.140.

The Micex Index of equities climbed 1.8 percent to 1,347.99. The index has lost more than 13% so far this year, as tension between Russia and the West over Ukraine’s breakaway Crimea region escalated.

Yesterday, the US President Barack Obama urged hid Russian colleague to de-escalate the crisis in Ukraine and indicated sanctions including individual visa bans and asset freezes, may be intensified to address specific sectors of the Russian economy, should Russia invade further in Ukraine.

“Investors’ fear of an escalation of the Ukraine crisis is going away,” Oleg Shagov, head of equity research at OAO Promsvyazbank, said in a Bloomberg interview from Moscow. “The risks of starker sanctions have come down.”

Demand for the Russian currency was heightened in the past week as nation’s exporters seek to sell foreign-currency revenue to meet their tax obligations.

According to the median of three estimates compiled by Bloomberg, the tax deadline for Russian companies peaks this week with payments of 290 billion rubles (around $8.2 billion) of corporate income tax until March 28.

Meanwhile, greenbacks demand was supported following upbeat US data.

Durable goods orders rose 2.2% in February, sharply exceeding analysts expectations of a 0.8% increase and following a 1.3% drop in the previous month, data by the US Commerce Department showed today. The increase was mainly driven by orders for motor vehicles and parts, which jumped 3.6 percent last month, the biggest gain since February last year, data from the report revealed.

Core durable goods orders, which exclude the volatile transportation items, rose 0.2% in February, slightly below analysts forecasts for a 0.3% gain and after a 0.9% advance in the previous month.

Elsewhere, EUR/USD touched a session low at 1.3790 at 08:50 GMT, after which the pair consolidated at 1.3801. losing 0.18% for the day. Support was likely to be received at March 25th low, 1.3749, while resistance was to be met at March 25th high, 1.3847.