Rouble steady ahead of U.S. sanctions vote, Fed rate decision

• The rouble was 0.1pc weaker against the dollar at 63.57, hovering near a month high of 63.46 hit on Tuesday.
• Analysts at VTB Capital said the U.S. FOMC meeting would take centre stage on Wednesday.
• The rouble is expected to trade around 64 versus the dollar, ING's Russia chief economist Dmitry Dolgin said in a note.

MOSCOW: The Russian rouble opened steady on Wednesday with market eyes trained on a U.S. Senate vote on legislation that might impose new sanctions on Russia, although analysts expect the currency to remain resilient to external shocks.

At 0746 GMT, the rouble was 0.1pc weaker against the dollar at 63.57, hovering near a month high of 63.46 hit on Tuesday. Against the euro, the rouble was flat at 70.45 .

This week, central bank rate decisions are in focus, starting with the Federal Reserve later on Wednesday, the European Central Bank on Thursday and Russia's central bank on Friday.

Analysts at VTB Capital said the U.S. FOMC meeting would take centre stage on Wednesday, with the Fed widely expected to leave interest rates unchanged.

In the next several weeks, the rouble is expected to trade around 64 versus the dollar, ING's Russia chief economist Dmitry Dolgin said in a note.

Dolgin said that risk factors for this forecast include the possible re-emergence of U.S.-Russia sanction rhetoric, including the Dec. 11 discussion of the Defending American Security from Kremlin Aggression Act, known as Daska.

At 1500 GMT, the U.S. Senate Foreign Relations Committee is expected to vote on legislation that may seek to punish Russia over its meddling in U.S. elections and aggression against Ukraine.

Other external factors that could influence the rouble's performance include U.S.-China trade negotiations, although Rosbank analysts said the market was continuing to show minimal reaction to geopolitical headlines.

Brent crude oil, a global benchmark for Russia's main export, was down 0.7pc at $63.9 a barrel.

In the domestic market, Russia's finance ministry will offer a new OFZ treasury bond on Wednesday, which matures in October 2027.

Yields on Russia's sovereign debt, which move inversely to their price, have fallen in line with successive interest rate cuts in 2019 and will react to the central bank's final rate decision of the year on Friday.

Analysts polled by Reuters forecast on average a 25-basis-point rate cut on Friday to 6.25pc.