The ruble: What prevents further growth against the dollar

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Russian ruble on Friday turned to growth, after reports that OPEC+ the total agreed production cuts of 1.2 million barrels per day, including a decrease of 200 thousand from Russia. Against this background, the USD / RUB pair fell 48 cents, and Monday morning opened down another 7 cents, to 66.26.
The EURRUB rate fell 36 cents to end the week and lost 24 kopecks in the morning, opened at 75.60. Getting support from oil, the ruble is still vulnerable to pressure from the negative dynamics of global markets.
Oil prices jumped on Friday by 7.7% within the day, from $59.20 to $63.75, while by the end of the week gave part strength. On Monday morning Brent is at $61.09.
The fact that the largest corporations have agreed to production cuts, is a strong support for oil prices. Probably, this event will be key to the further dynamics of the oil and contributes to the completion of the collapse, which was observed since the beginning of October.
Technical analysis also speaks in favor of further rebound: momentum reduction are exhausted, and the oil came out of the oversold area.
However, this alone may not be enough to return a positive on the Russian market. On global platforms developing pressure after a string of weak data from the US, China and Japan.
As a result, the demand for protective assets, and it usually “undermines” the position of the ruble. It turns out that in this situation, the Euro could benefit.
Short-term, we see a revaluation by investors of prospects of a US rate hike, which will undoubtedly weaken the U.S. currency. However, development pressure is very often ends with a rise, not the decline of the dollar, even if the economic problems experienced by the United States itself.
Thus, the immediate goals of the movement’s key pairs with ruble can be reduced to 66 per dollar and a rise above 76 per Euro.
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Alexander Kuptsikevich,
Senior analyst,
FxPro