Dealers note talk of russian buying of USD/RUB and EUR/USD today. To me, this is likly an exercise in reserve rebuilding after Russia was forced to intervene massively last fall to support the rouble. Capital flight from Russia was intense given the collapse in the energy economy as well as on geopolitical concerns after its Georgian invasion.
Now that Oil is rebounding and the global economy looks to have bottomed, Russia is buying both USD and EUR to refill its depleted coffers.
EUR/USD reached 1.3454 on its most recent push higher as the market takes the ECB’s modest quantitative easing measures in stride.
