USD/RUB weaker below 57.00, Fedspeak, OPEC eyed

The Russian Ruble stays on a strong fashion at the beginning of the week, taking USD/RUB to sub-57.00 levels albeit off daily lows for the time being.

USD/RUB lower on Brent advance

RUB is deriving extra buying interest following the continuation of the rally in crude oil prices, with the barrel of Brent crude advancing for the third week in a row and currently hovering over the key $54.00 mark.

It is worth noting that prices of the barrel for the European reference crude oil gained more than 16% since early May lows near $46.60, always against the backdrop of a probable extension of the OPEC output cut deal for 6/9 months, likely to be announced at the cartel’s meeting on Thursday.

The softer tone in the greenback is also helping the decline in spot, with the US Dollar Index recording fresh 2017 lows in the vicinity of 96.80, eroding initial gains to the 97.30 area.

Data wise, the Chicago Fed National Activity Index rose to 0.49 in April surpassing estimates and March’s reading. Next on tap will be the speeches by FOMC’s L.Brainard (permanent voter, centist), Philly Fed P.Harker (voter, hawkish) and Minneapolis Fed N.Kashkari (voter, dovish). In Russia, Retail Sales, the jobless rate and Real Wage Growth are all due later.

Somewhat opposed to the ongoing RUB strength, speculative net longs have retreated to the lowest level since late September in the week to May 16, according to the latest CFTC report.

USD/RUB levels to watch

At the moment the pair is losing 0.37% at 56.76 facing the next support at 56.37 (low May 22) followed by 56.08 (low May 15) and then 55.67 (2017 low Apr.25). On the other hand, a break above 57.16 (high May 22) would expose 58.12 (high May 18) and finally 59.07 (high May 5).