Rouble approaches 4-month lows vs dollar, weighed down by geopolitics

MOSCOW: The rouble slipped on Tuesday, bucking the generally positive mood on global markets, hit by political turmoil in neighbouring Belarus and pressure on Russia to investigate the suspected poisoning of an opposition leader.

Having opened 0.2% stronger against the U.S. dollar, the rouble then eased and by 1158 GMT was down 0.2% at 74.8, approaching 4-month lows. Versus the euro it slipped 0.5% to 88.37, a five-month low .

Global markets perked up on Tuesday following signs of easing Sino-Russian trade tensions. The issue is closely watched by Russian currency traders, who tend to sell the rouble when sentiment turns negative in favour of more secure assets.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin held a phone call with Chinese Vice Premier Liu He in which they reaffirmed their commitment to a Phase 1 trade deal.

This was the two countries' first formal dialogue since early May.

But analysts from Sberbank CIB said the rouble was under pressure from geopolitical risks and was likely to test the 75-per-dollar mark, a level last seen early-May.

The currency faces pressure from mass strikes and demonstrations in neighbouring Belarus whose leader is a long-standing ally of Russia.

Risk aversion also increased after a Berlin hospital said it had found indications of poisoning in Kremlin critic Alexei Navalny, who is in a medically-induced coma.

The Kremlin said however it saw no reason for now to investigate the circumstances around his illness.

The rouble's decline comes despite a 1.2% rise in Brent crude prices, a global benchmark for Russia's main export, crude , as traders weighed storm-induced production cuts in the U.S. Gulf Coast against rising coronavirus cases in Asia and Europe.

Russia's dollar-denominated RTS equity index slipped 0.4% to 1,276.3 points but the rouble-based MOEX Russian index little changed on the day at 3,029.3 points.