NEW YORK: The Russian rouble posted its sharpest fall against the US dollar since 1998 on Monday, while the greenback slipped against the yen after a new slide in oil prices ignited concerns over the health of the global economy.
The rouble weakened beyond 60 roubles per dollar for the first time as 5-1/2-year lows in oil prices threatened Russia's economy. Sales of oil and gas are Russia's chief source of export revenue, while tougher US sanctions on Moscow, which were set out in a bill passed by US Congress Friday, added to Russia's economic woes.
The drop in oil prices also stoked worries over the global economy and supported the safe-haven yen.
The dollar was last up 13.2 percent against the rouble to trade at 65.9 roubles per dollar.
"The viciousness of the decline in oil prices caught investors by surprise, and now they're thinking there's more to this than meets the eye," said Boris Schlossberg, managing director of currency strategy at BK Asset Management in New York. "Russia is being squeezed from all sides right now.
It's Vladimir Putin's worst nightmare," he added.
Risk-aversion pushed the dollar lower against the safe-haven yen.
The dollar was slightly higher against the euro, however, on bets that the US Federal Reserve will take a more hawkish tone on US monetary policy at the end of a two-day meeting on Wednesday.
Analysts said the Fed may remove the phrase "considerable time" in reference to its timetable for raising rates, which could spur a dollar rally. Higher interest rates are expected to boost the dollar by driving investment flows into the United States.
"With the Fed meeting, the weight of expectations for dollar strength is very high," said David Rodriguez, quantitative strategist at DailyFX.com, a unit of retail FX broker FXCM in New York. He said the greenback could weaken considerably if the Fed remains dovish, however.
The euro was last down 0.21 percent against the dollar at $1.2435.
The dollar was up 0.17 percent against the Swiss franc at 0.9656 franc.
The dollar was last 0.83 percent lower against the yen at 117.80 yen.
The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.14 percent at 88.493.
On Wall Street, the benchmark S&P 500 stock index closed down 0.63 percent.
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