MOSCOW: The Russian rouble fell back on Wednesday as revived expectations of a rise in U.S. interest rates in the near future boosted the dollar and weakened global risk appetite.
At 0810 GMT, the rouble was 0.7 percent weaker against the dollar at 65.14 and had lost 0.2 percent to 73.35 versus the euro.
The dollar has rallied globally after U.S. economic data strengthened the case for the U.S. Federal Reserve to raise interest rates soon.
The rouble had firmed at the start of the week as the oil price rallied towards 2016 highs near $50 per barrel. However, the oil price was subdued on Wednesday, weighed down by the stronger dollar.
Brent crude, a global benchmark for Russia's main export, was down 0.6 percent at $49 a barrel.
ING economist Dmitry Polevoy said in a note that the rouble had lagged the rise in the oil price, suggesting it may be undervalued according to fundamentals.
"If one allows that such a model works not badly only in relatively stable market conditions, the main conclusion is that the rouble is fairly valued without any signs of overvaluation," he said.
Instaforex analyst Ivan Kovalev said the rouble's cautious reaction to higher oil prices was explained by fears the central bank may resume forex purchases to replenish its reserves.
Russian share indexes fell back on Wednesday, tracking global stock markets which have weakened on the revived expectations of higher U.S. interest rates.
The dollar-denominated RTS index was down 1.2 percent to 920 points, while the rouble-based MICEX was 0.3 percent lower at 1,904 points.
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