14.04.202009:42 Forex Analysis & Reviews: Review for USD/RUB on April 14, 2020

Seems like the Russain rouble is the only currency which did not react to a historic production cut agreement between OPEC and its allies. Even the euro has somehow reacted to the deal. Today, practically everyone calls the agreement historic. According to the deal, the participating countries will initiate a reduction in oil output by 9.7 million barrels per day from May. At the beginning, there were expectations that the production could be reduced by 19 million barrels per day. At the same time, some 20 million barrels per day of oversupply is estimated in April.

However, the Russian rouble is likely to come under pressure due to the coronavirus pandemic. Unfortunately, the number of infection cases in the country is growing day by day. It seems like the quarantine restrictions in Russia can be extended. In this case, small-sized businesses are likely to be closed down while people can lose their jobs. In the best case scenario, people can retain their positions while companies may not be able to pay salaries. Employees can be asked to take a leave of absence. Thus, people are likely to run out of money relatively soon. Against this background, the consumer demand in Russia can fall significantly, followed by bankruptcies of companies across the country. Russia's services sector is likely to be affected in the first place. Thus, if the coronavirus crisis extends, the events which are now taking place in the US can happen in Russia. In this case, unemployment in the country is expected to increase sharply.

At the same time, the rouble is expected to rise today. This is nothing but a belated reaction to the production cut agreement. However, reductions for May and June are relatively small. In two months, the deal will probably be extended and improved. That is why the Russain rouble remains relatively flat. The greenback is expected to be trading at 73.00-72.25 roubles.