FxWirePro: USD/RUB rally resumes, shorts on BCS fetch assured returns – longs functioning on table

Ruble has been one of the most vulnerable EM exchange rates, we had advocated debit call spreads a fortnight ago (Refer below link for further readings), our 7D shorts have certainly would have yielded handsome gains, now is the turns of long positions which is evidencing in last two days rallies of USDRUB:

http://www.econotimes.com/FxWirePro-USD-RUB-debit-call-spreads-for-swing-traders-86791

The Russian ruble has been the most volatile EM exchange rate over the past month, closely tracking gyrations in the crude oil price. That relationship is set to break down as we approach year-end. Heavy USD debt redemptions in Q4 and Fed tightening are likely to put downward pressure on the ruble, even if crude oil prices rise.

A pause in the central bank's easing cycle this month - it has cut interest rates from 17% to 11% since the start of the year - came after over 35% depreciation in the ruble against the USD. This has exerted upward pressure on inflation. Political pressure to cut interest rates, however, persists as economic activity continues to contract, clouding the outlook for future monetary policy.

Fiscal strains are also evident due primarily to the low crude oil price environment, with the government removing budgetary restrictions this year. Since the government's fiscal position benefits from a weak ruble the authorities are in no rush to see a rapid appreciation in the exchange rate.