• USD/RUB crosses the previous record high marked in January 2016 amid broad rally in safe-havens.
• Ukraine imposed martial law as Russia begins the much-feared war.
• Hawkish Fedspeak also underpins the DXY’s biggest daily gains in a month.
• Geopolitical headlines are crucial for further direction, US Q4 GDP will decorate calendar.

USD/RUB rallies to the record top of 86.81 as Russia invades Ukraine, propelling the market’s rush to risk-safety during early Thursday morning in Europe.

The Russian ruble (RUB) pair also justifies the market’s increasing expectations of a faster Fed-rate-hike trajectory.

Ukraine President Volodymyr Oleksandrovych Zelenskyy recently confirmed, “Russia carried out missile strikes on our infrastructure and on our border guards.” In doing so, the national leader also imposes martial law in Ukraine while advising to stay at home as much as possible.

On the other hand, IFAX came out with the news saying, “Russian-backed rebels say start attack on Ukraine-controlled town near Luhansk.”

Earlier in the day, US President Joe Biden promised “further consequences” for Russia while US Senator Marco Rubio, also the Vice-Chairman of the Select Committee on Intelligence, said that Russian airborne attempts seizing control on Kyiv airport.

While portraying the risk-off mood, the US 10-year Treasury yields snap two-day rebound by declining around nine basis points (bps) to 1.88% whereas S&P 500 Futures drop over 2.0% by the press time. It should be observed that the US Dollar Index (DXY) rises 0.40% intraday due to its safe-haven appeal at the latest.

Considering the US dollar’s traditional safe-haven status, USD/RUB is likely to witness further upside until the war is over. Also adding to the upside momentum are the recent hawkish comments from San Fransisco Fed President Mary Daly. That said, the second reading of the US Q4 GDP, expected 7.0% annualized versus 6.9% prior, will decorate the calendar.

Technical analysis

Although an extended war is likely to propel the quote towards 90.00, pullback moves may aim for the previous all-time high of 85.98, marked in January 2016, before aiming March 2020 top surrounding 82.85.