MOSCOW: The Russian rouble firmed on Wednesday as the market pared losses from the new US sanctions on Russia, with the trade war between Washington and Beijing remaining in focus following the yuan's fall.
At 0740 GMT, the rouble was 0.3pc stronger against the dollar at 65.1 and had gained 0.3pc to trade at 72.94 versus the euro.
Last week, the US President Donald Trump had signed an executive order, under which the US government would block international financial institutions such as the World Bank from lending to governments subject to US sanctions for using chemical or nuclear weapons.The rouble regained ground as tensions related to the sanctions faded.
"Some players were too worried about the risk of sanctions," a dealer of a large Russian bank said.
On Tuesday, the rouble and other emerging market currencies recovered from a sharp decline as Chinese state banks stepped in to stabilise the yuan, which fell to past the 7-per-dollar level this week.
The move to contain the yuan's decline by China's major state banks comes after the Chinese-US trade war broadened to include foreign exchange, with Washington on Monday branding Beijing a currency manipulator for the first time since 1994.
The Russian currency strengthened despite the oil prices, Russia's main export, dipping on Wednesday as potential damage to the global economy and fuel demand from the trade dispute continued to cast a shadow over the market.Brent crude oil was down 0.2pc at $58.77 a barrel.
Later in the day, the Russian currency could receive support later in the day from the Finance Ministry's weekly auction of OFZ treasury bonds.
The dollar-denominated RTS index was flat to 1,294 points. The rouble-based MOEX Russian index was 0.4pc lower at 2,673 points.
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