Russian rouble opens up after Russia-Turkey deal on Syria's Idlib

MOSCOW: The Russian rouble opened higher on Tuesday, supported by talks between Russia and Turkey over Syria's Idlib aimed at preventing a wider escalation of the military conflict in the country.

At 0706 GMT, the rouble was 0.25 percent stronger against the dollar at 67.89 and had gained 0.18 percent to trade at 79.36 versus the euro.

Russian and Turkish troops are to enforce a new demilitarised zone in Syria's Idlib region from which "radical" rebels will be required to withdraw by the middle of next month, Russian President Vladimir Putin said on Monday after a meeting with his Turkish counterpart.

At the same time, U.S. President Donald Trump on Monday imposed 10 percent tariffs on about $200 billion worth of Chinese imports, and threatened to levy duties on an additional $267 billion of Chinese goods if Beijing retaliates.

China's yuan currency edged lower on Tuesday after Trump's decision but Chinese stocks bounced in afternoon trading, led by a rally in infrastructure shares, with some betting that Beijing will step up investment in roads and bridges to offset the impact of Trump's latest tariff salvo.

Andrey Kochetkov, an analyst with Otkritie Brokerage, said in a note on Tuesday that the key risk from the U.S.-China trade war was a potential slowdown in global trade which could limit appetite for commodities from, and investments in, leading producers such as Russia.

Yet, Kochetkov said that the Idlib talks were supportive for the rouble as Russia seeks a peaceful resolution rather than a potential offensive in the province.

"In fact, we can talk of a loosening of the geopolitical premiums in the rouble and Russian assets, so the domestic market's reaction to the U.S. tariffs on China is likely to be quite moderate," he said in the note.

Last week, the Russian central bank raised interest rates for the first time since late 2014 and promised not to buy foreign currency on the market until the end of this year as it acknowledged the risks of a weaker rouble and U.S. sanctions.

"As we have highlighted before, we think that fundamentally the rouble has room to appreciate, given the current level of oil prices and sentiment," VTB Capital said in a note on Tuesday.

Brent crude oil, a global benchmark for Russia's main export, was down 0.47 percent at $77.68 a barrel.

Russian stock indexes were up.

The dollar-denominated RTS index was up 0.36 percent to 1,103.5 points. The rouble-based MOEX Russian index was 0.07 percent higher at 2,375.53 points.