Rouble falls past 74 vs dollar for first time in two weeks

MOSCOW: The Russian rouble weakened past 74 against the US dollar for the first time since July 26 on Tuesday, while Russia's leading banks outperformed the broader market after posting sound financial results.

After being flat for most of the day, the rouble lost ground in the second half. As of 1355 GMT, the rouble was 0.4% weaker at 73.97 versus the dollar after hitting 74.05, a level last seen on July 26.

The Russian currency market was overloaded with long rouble positions and buying of foreign currency by some players could have triggered stop-loss orders, said a forex dealer at a major Western bank in Moscow, explaining the sharp weakening in the rouble.

Against the euro, the rouble eased 0.2% in light trade to 86.65.

Russian rouble steadies near 73 vs dollar

The rouble stabilised recently, supported by inflows of foreign funds into Russian OFZ treasury bonds amid expectations that the central bank's monetary tightening cycle could be close to its end.

However, lingering geopolitical concerns and volatility in oil prices limited room for gains in the currency.

Brent crude oil, a global benchmark for Russia's main export, was up 2.2% at $70.55 a barrel, recouping some of the losses in the previous session when prices hit a three-week low. Still, gains are likely to be limited by concerns that rising COVID-19 cases and restrictions in China will dent fuel demand.

Russian stock indexes were up.

Russian rouble steadies before central bank rate meeting

The dollar-denominated RTS index rose 0.3% to 1,645.8 points, and the rouble-based MOEX Russian index was 0.7% higher at 3,863.2 points.

"We expect the situation on the Russian stock market to be favourable for banks as well as gas and fertiliser producers this week," Alfa Bank said in a note.

Shares in Russia's largest lender Sberbank and the second-biggest bank VTB were up 0.9% and 1.8%, respectively, after both state-run lenders posted strong earnings under Russian accounting standards.