Russian rouble firms towards 74 vs dollar as oil prices edge higher

MOSCOW: The Russian rouble firmed on Tuesday, hitting its highest level in nearly a week against the dollar and heading towards the 74 mark, boosted by higher oil prices.

At 0725 GMT, the rouble was 0.4% stronger against the dollar at 74.14, its strongest since July 7.

It gained 0.4% to trade at 88.00 versus the euro , also touching a one-week high.

Brent crude oil, a global benchmark for Russia's main export, was up 0.4% at $75.45 a barrel.

The rouble came under pressure last week on skittish oil prices after the collapse of output talks between the Organization of the Petroleum Exporting Countries and allies including Russia, or OPEC+.

Russian rouble weakens as oil prices edge lower

Investors also have an eye on the U.S. inflation outlook and the speed of the Federal Reserve's future policy tightening ahead of Tuesday's consumer price data and Fed Chairman Jerome Powell's testimony from Wednesday.

"Ongoing inflationary pressure would add more impetus for a sooner-than-planned tightening of the Fed's policy, likely leading investors to exit risk trades," BCS Global Markets said in a note, but slower inflation would be more supportive for the rouble.

Russia's annual inflation, which accelerated to 6.5% in June, is seen returning to the 4% target in the second half of next year, the central bank said on Monday.

Governor Elvira Nabiullina said this month the board may consider raising rates by 25-100 basis points at its July 23 meeting to rein in inflation.

Russian stock indexes were higher.

The dollar-denominated RTS index was up 0.4% to 1,647.5 points. The rouble-based MOEX Russian index was 0.1% higher at 3,879.5 points.