Rouble climbs to two-week high vs dollar, risks linger

MOSCOW: The rouble climbed to a two-week high against the dollar on Friday, helped by relatively strong oil prices, even as geopolitical risks and a sanctions threat from the European Union hovered over Russian assets.

At 0726 GMT, the rouble was 0.4pc stronger against the dollar at 77.08, earlier hitting 76.97 for the first time since Sept. 25.

It had gained 0.3pc to trade at 90.73 versus the euro, just over a one-week high.

Brent crude oil, a global benchmark for Russia's main export, was up 0.2pc at $43.42 a barrel, close to a three-week high.

"The rouble may continue to strengthen against the backdrop of the stable oil price situation and investors' continued interest in risk assets," said Bogdan Zvarich, chief analyst at Promsvyazbank.

Political unrest in Kyrgyzstan, turmoil in neighbouring Belarus, a military conflict in the South Caucasus and the suspected poisoning of Kremlin critic Alexei Navalny all exerted pressure on the rouble.

France and Germany said on Wednesday they would propose European Union sanctions against Russian individuals after receiving no credible answers from Moscow over the poisoning of Navalny with a nerve agent.

Rising coronavirus cases at home and worldwide continued to weigh on Russian assets. BCS Global Markets said looming lockdowns and partisan squabbling in the United States over stimulus measures were among the factors darkening the external outlook.

Supporting the rouble, the central bank continued selling foreign currency, having stepped sales this month.

The bank, which reports the sales with a two-day lag, said on Friday it had sold 8.6 billion roubles ($111.7 million) worth of forex on Wednesday. Russian stock indexes were steady.

The dollar-denominated RTS index rose 0.2pc to 1,161.1 points. The rouble-based MOEX Russian index was 0.2pc lower at 2,840.2 points.