USD/RUB firmer, flirting with 58.00 as Brent melts

The Russian Ruble is sharply lower vs. its American peer in the second half of the week, taking USD/RUB to the 58.00 neighbourhood for the first time since mid-March.

USD/RUB higher on Brent rout

RUB derived extra weakness today after the barrel of Brent crude broke below the critical $50.00 mark, threatening to visit YTD lows near $49.70 seen in late March. Supply glut jitters plus uncertainty over an extension of the ongoing OPEC/non-OPEC output cut deal continue to weigh on sentiment, always against the backdrop of rising US oil production.

The greenback, in the meantime, keeps gravitating around the 99.00 handle when tracked by the US Dollar Index (DXY), amidst a solid performance of yields in the US money markets.

The pair is thus advancing for the third consecutive session so far this week, with crude oil dynamics acting as the exclusive driver for the price action.

In the data space, FX Reserves held by the CBR rose to $401.1 billion from last week’s $400.0 billion. In the US docket, Initial Claims came at 238K WoW while the trade deficit dwindled to $43.7 billion in March.

USD/RUB levels to watch

At the moment the pair is gaining 1.02% at 57.97 facing the next hurdle at 58.19 (high Mar.22) followed by 59.60 (high Mar.14) and finally 60.56 (high Jan.28). On the downside, a break below 57.39 (low May 4) would open the door to 57.31 (55-day sma) and finally 56.68 (20-day sma).