Oil is pushing the ruble higher

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On Friday, September 6, the auction on ruble pairs ended lower. The dollar/ruble fell by 0.78%, to 65,783 RUB, EUR/RUB – on 0,78%, to 72,49 RUB, GBP/RUB – on 0,93%, to RUB 80,79
Trading on Masuria opened lower in the U.S. dollar and single currency. The price of Brent crude oil consolidated at $60,90 pending the publication of the report on the labor market in the United States. In this regard, in early trading market participants have followed the index RGBI, protective assets, and the decision of the Central Bank of the Russian Federation.
The reaction of the ruble to the actions of the regulator was neutral as the market was expecting a reduction in the key rate by 25 b.p. to 7.00% per annum. Bank of Russia Chairman Elvira Nabiullina said at his press conference that if economic conditions develop in accordance with the forecast, then one of the next meetings the rate will be reduced one more time.
Incredibly, the ruble has quietly experienced a 3 percent drop in oil prices. The pressure on the oil market could have a weak data on industrial production in Germany. Industrial production unexpectedly fell in July, which was subjected to the largest economy of Europe to the risk of recession in the third quarter.
Then the market decline in reaction to the news that the Chinese authorities are planning to increase the share of electric vehicles in total sales to 60% by 2035, which could also negatively affect oil demand in the future.
On the American session, the ruble managed to strengthen against foreign currencies after the release of mixed data on the labor market in the United States. The number of new jobs in the U.S. in August was slightly less than the projected level, while the average wage and the level of participation in the labor force increased.
By the close of the day, the ruble has already received support from the oil market, as buyers played all the losses sustained and updated daily high. The Chairman of the US fed Powell for his performance failed to weaken the Russian currency, while the greenback rose to his statements. Powell said that the us economy is in good shape and the prospects for its development are favorable. Market participants interpreted his statement as a signal that one should not expect the September reduction in the level of key interest rates by 50 b.p.
Monday, September 9, Brent crude oil rose 0.5% to $61,88. Buyers have two days before a new report on oil reserves. Nothing prevents them now to raise the price to $63,75.
In the morning session Mosbirzhe the dollar by 11:20 Moscow time loses 18 cents and traded at the level of 65.55 ruble, the Euro is also down 18 cents, to 72,32 ruble.
The ruble has all the conditions to open rising against foreign currencies. The pair dollar/ruble is at an equilibrium level since August 2. If the support of 65.50’t resist, the price moves to the level of RUB 64,75 Obstacles to the depreciation of the dollar, I do not see.
Vladislav Antonov,
“Information-analytical center “Alpari”