20.10.2020: RUB to gain support from tax payments in Russia (Brent, USD/RUB)

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Oil traders were disappointed by the outcome of the OPEC+ meeting. The downtrend in the oil market may put pressure on the Russian currency. The ruble is at risk of new sell-offs due to a moderately negative background and a drop in emerging markets currencies.
Oil is steadily moving to the downside. During its meeting on Monday, the OPEC+ ministerial panel decided to stick to its current production plan. Investors were disappointed by the news as they hoped to see additional output cuts from January next year.
Still, market participants remain optimistic. They hope that the cartel could agree to reverse its plans to increase the output from January to March due to a weak fuel demand.
Besides, the uncertainty around a stimulus package in the US adds to the rising worries. The US authorities are unlikely to reach an agreement over this issue before the presidential election. Negotiations held yesterday did not provide any clarity to the markets. House Speaker Nancy Pelosi noted that the possibility was very slim.
Oil prices get slight support from the expectations that US weekly crude inventories have decreased. At the moment, there are no strong factors to encourage oil traders and cause a steady upward movement.
In the morning session, Brent oil futures were trading down by 0,25% at 45 dollars 50 cents per barrel. WTI contracts for November followed a similar trajectory. WTI futures moved slightly lower, struggling to hold at the level of 41 dollars per barrel.
Today, global oil prices will most likely stay under pressure amid a controversial background. Brent quotes are expected to hold within a current trading range of 40-43 dollars per barrel.
Meanwhile, the dollar/ruble pair has found a strong support at the level of 77.00. The ruble is sure to extend losses if the background and the situation in the oil market deteriorate. In this case, the US dollar will advance against the ruble to the 78 mark.
Despite prevailing negative factors, the Russian currency is still able to consolidate and move just above the 77.50 level. Today, as well as in the coming sessions, the outlook for the dollar/ruble pair remains mostly the same. The US dollar is expected to hold within the range between 77.50 and 80.00 against the ruble.
The ruble may benefit from the tax payment period in Russia with its peak next Monday. This factor may keep the ruble from a deeper decline and even promote a rise in the exchange rate. However, the ruble is unlikely to break through the support level of 77.00.

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