21.08.2020: RUB may drop to 75.00 against USD (Brent, USD/RUB)

The increased volatility on global stock markets has affected the dynamics of Brent. Brent futures contract is about to break below the lower boundary of the trading channel where it has been holding for two weeks. The Russian ruble stays under pressure. The upcoming peak of the tax payment period in Russia may help keep the ruble from a deeper fall.
In the morning trade, oil attempted to move higher but failed to do so. Oil quotes continue the downward movement amid low risk appetite. The price is struggling to leave the narrow range of 44.50 and 45.70 dollars per barrel where it has been stuck for the past two weeks.
Brent oil futures for October were trading at 44 dollars 76 cents per barrel in the day session. Brent lost about 0.31% from yesterday’s closing levels. WTI crude futures with the nearest expiration settled at 42 dollars 60 cents per barrel. So, the trajectory of US crude remained almost unchanged from previous sessions.
Oil is likely to trade steadily throughout the day. The dynamics of crude prices may change only later in the day when the data on active oil rigs is released. This report from Baker Hughes and the overall sentiment in global markets will set the tone for Brent for the next trading week.
On Thursday, the pressure on oil prices came from the US Department of Labor. The unexpected rise in initial jobless claims disappointed investors. Market participants continue to monitor the situation with the coronavirus spread and are still evaluating the results of the OPEC + meeting.
On Thursday, the ruble was trading considerably lower. As expected, the dollar/ruble pair left the range of 73.00 and 73.60 and tested the level of 74. This rise in the pair happened amid worsening sentiment in global stock and energy markets. On Friday, the Russian currency failed to regain ground and retreated against its American counterpart. As a result, the dollar/ruble pair added 0.6% in the day trade and settled at the level of 74.24. If market sentiment deteriorates further, then the pair may easily test the mark of 74.68.
The ongoing tax payment period, as well as possible improvement of external background, may help support the ruble. Today, it may dip below the mark of 74 in the course of the session. In general, the prospects for the ruble remain rather gloomy in the next two weeks. It is very likely that the dollar will start moving towards the upper boundary of the current channel of 70 and 75 against the ruble.

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