MOSCOW: The Russian rouble firmed in thin trade on Tuesday afternoon, gaining ground as the U.S. currency sank on global markets before a Federal Reserve meeting starting later in the day.
The Russian currency had traded sharply weaker early on Tuesday as exporters scaled back forex sales for tax purposes and as traders positioned for a Russian central bank meeting on Thursday at which the market expects a rate cut.
At 1510 GMT, the rouble was around 0.9 percent stronger against the dollar at 51.51 and was 0.1 percent stronger at 56.56 versus the euro.
The dollar fell over 0.7 percent against a basket of currencies.
Worries that the U.S. economy is stalling, following a run of weaker-than-expected data, have seen the dollar slip in recent weeks as expectations of an interest rate rise in June have faded.
Tuesday is the last day of Russia's end-of-month tax period, during which the rouble is typically supported by exporters selling foreign-currency earnings to meet rouble-denominated taxes.
A dealer at a large Russian bank said algorithmic trading had exacerbated moves in the rouble and described afternoon trading on Tuesday as lacking any guiding idea.
"I believe the market will gradually 'deflate' as we approach the public holidays, although the central bank could surprise and cause prices to swing," the dealer added. A four-day public holiday weekend starts in Russia on May 1.
Economists polled by Reuters expect that the central bank will cut rates by at least 100 basis points when it meets on Thursday.
Russian share indexes were little changed on Tuesday.
The dollar-denominated RTS index was up 0.1 percent to 1,024 points, while its rouble-based peer MICEX was 0.1 percent weaker at 1,675 points.
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