Rouble soars as vaccine optimism outweighs COVID-19 fears

MOSCOW: The rouble rose sharply on Monday, gaining 1% against the dollar, as optimism in global markets for a vaccine against COVID-19 outweighed fears of a resurgence in the pandemic, with cases in Russia reaching a daily record high.

By 1159 GMT, the rouble was 1.2% stronger against the dollar at 76.45, pulling away from a one-week low hit on Friday. It gained 1.3% to trade at 90.42 versus the euro .

Brent crude oil, a global benchmark for Russia's main export, was up 3% at $43.08 a barrel.

"Optimistic sentiment is prevailing on markets, in spite of the difficult epidemiological situation, which will allow the rouble to recover to 76.6 versus the dollar today," said Sberbank CIB, the investment arm of Russia's largest lender Sberbank, in a note.

Russia reported a record 22,778 new daily coronavirus cases on Monday as Moscow sought more hospital beds, having turned an ice rink into a temporary hospital to handle the influx of patients.

The rouble is expected to receive additional support from month-end tax payments that usually lead export-focused companies to convert foreign currency revenues to meet local liabilities.

Russian stock indexes have climbed to their best levels in recent months.

"Investors are looking past the COVID-19 pandemic and pinning hopes on vaccines and economic recovery, with emerging markets, Russia in particular, poised to be key beneficiaries of the reflation trade," said Alfa Bank in a note.

The dollar-denominated RTS index rose 3% to 1,253.5 points. The rouble-based MOEX Russian index was 1.4% higher at 3,067.4 points, a near three-month high.