10.10.2019: RUB and oil unlikely to rise (Brent, USD/RUB)
Oil has slipped to a negative territory while the ruble buyers still act cautiously. Market participants are awaiting the news from Washington.
The US and Chinese diplomatic delegations are meeting today for trade negotiations. According to the world media, the two countries may enter into a currency agreement as a part of a trade deal. This will be a rather unexpected move. Overall, market participants remain worried as the two sides are not very optimistic about reaching an agreement. In this context, the reduced appetite for risk seems logical.
On Wednesday, the ruble was trading steadily and managed to go below the level of 65 closing the trading day with gains. Such dynamics of the Russian currency was mainly formed by the oil prices.
Today, the dollar/ruble pair continues to decline and is currently trading at the level of 64.72. During the day, it is worth focusing on the range between 64.75 – 64.78 as the breaking of this border will give the bearish momentum to the pair. The price growth to the level of 65 is also very possible today.
The oil has significantly gained ground, supported by the global geopolitical tensions. Today, Turkey has launched a military operation in Syria. Moreover, the recent unrest in Iran and Ecuador resulted in a drop of oil supply from these countries. Besides, the data on oil inventories from the US Department of Energy has slowed down the bearish trend. The US crude inventories rose more than expected last week. Oil exports increased to 3.4 million barrels per day, showing the highest volume since June. Official data continues to weigh down on oil prices on Thursday. The price for Brent has eased to 58 dollars 25 cents.
Further market dynamics will depend on the released statistical data and news regarding the US-China trade talks. Traders are tired of the ongoing uncertainty and hope that this time the parties will be able to take any practical actions.
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