USDRUB: Pair Rises Ahead of Average Hourly Earnings and Nonfarm Payroll Data

Jul 2, 2021 06:21 PM ET
USDRUB: Pair Rises Ahead of Average Hourly Earnings and Nonfarm Payroll Data
  • Analysts estimate the earnings to surge 3.7% for June 2021 (YoY). 
  • The US coronavirus cases have dropped 29.17% from highs of 22,630 daily cases recorded on June 1, 2021. 
  • Russia’s inflation is expected to decline from 0.74% in May 2021 to 0.65% in June 2021. 

The USDRUB pair was up 0.38% as of 2:10 am GMT on July 2, 2021, from the previous day's close. It opened trading at 73.1925 and reached a high of 73.4580. The US dollar gained traction against the Russian ruble ahead of the average hourly earnings report to be released later on July 2, 2021. According to the US Bureau of Labor Statistics (BLS), mean earnings per hour rose 2.0% as of May 2021 (YoY) from a low of 0.4% in April 2021. Analysts estimate the earnings to surge 3.7% for June 2021 (on annual rate) despite a lower monthly expectation at 0.4%. 

Also slated for release in the US nonfarm payroll data for June 2021 (MoM) that stood at 559,000 for May 2021. This data is expected to increase to 700,000 with investors hopeful about the strength of the dollar and the US economy. 

IMF projection

Owing to a strong vaccination campaign in the US and the positive impact of the federal stimulus, the International Monetary Fund (IMF) projected that the US economy will surge 7% in 2021. The financial body highlighted the inflation risk as the main challenge facing America. Forecast for the US economic growth by the IMF in April 2021 stood at 4.6% with that of 2022, rising from 3.5% to 4.9%. 

Approximately 47.2% of the US population is fully vaccinated out of the 327 million doses issued. In states like New York and California, the rate of those fully vaccinated has reached 50%. As of June 30, 2021; a total of 180,674,739 (55%) Americans had received at least one dose with more than 154 million fully vaccinated.  

The two weeks leading to June 30, 2021, saw the number of new coronavirus cases oscillate between 12,000-16,000. 

New Covid-19 cases in the US

New Covid-19 cases in the US

On a monthly analysis, the cases have dropped 29.17% from highs of 22,630 daily cases recorded on June 1, 2021. The strong vaccination campaign has kept average daily cases below 17,000 after reaching a peak of 300,777 on January 8, 2021. 

Russia’s disinflation 

As analysts project the US inflation rate to hit 3.5% in 2021, Russia’s Minister of Economic Development reported that the country would experience disinflation. The slow consumer price growth in June 2021 would lower economic fluctuation trends as compared to May 2021 (MoM). 

Inflation declined from 0.74% in May 2021 to 0.65% in June 2021. May 2021 saw FAO’s (food index) jump 4.8% with the price of the main agricultural products- wheat and vegetable oil expected to reverse their June earnings. 

The high inflation rate in May 2021, coincided with Russia’s increase in GDP at 10.9% (YoY). This increase was attributed to the rise in the price of crude oil. August contract for WTI crude oil topped $76 per barrel on July 1, 2021. The September 2021 contract for Brent Oil hit a high of $76.59 on July 1, 2021. On a 52-week range analysis, Brent oil rose from a low of $35.74 to a high of $76.71 indicating a rise of 80.44%.

Russia’s main commodity making up 52% of total export since 2019 has been oil, mineral fuels and distillation products.

Technical analysis

The USDRUB pair formed a double bottom with the upward breakout confirmation at 73.541. Prices are expected to hit a short-term bullish reversal in response to the pattern and move towards 74.236. 

USD/RUB chart

Failure of the double bottom may see the price decline to 72.081. However, the 14-RSI supports a strong buying momentum at 59.84. 

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