The Russian rouble weakened back past 89 against the dollar on Tuesday, weighed down by domestic political concerns and with limited support factors beyond higher oil prices.
At 0749 GMT, the rouble was 0.5% weaker against the dollar at 89.16 and had lost 0.6% to trade at 97.23 versus the euro. It had shed 1.1% against the yuan to 12.32.
The rouble was correctively trying to strengthen in the previous session. Its pull back from an over 15-month low, hit on Friday, cannot be ruled out, wrote Alor Broker in a note.
Russian rouble steadies after last week’s slump to over 15-month low
Capital controls have helped insulate the rouble against geopolitics in the 16 months since Russia invaded Ukraine, but mercenary leader Yevgeny Prigozhin’s aborted march toward Moscow on June 24 reverberated through markets and raised questions about President Vladimir Putin’s grip on power.
The rouble lost more than 9% in June and is down around 20% so far this year, making it one of the world’s worst performers.
Russia’s currency is unlikely to find much room to strengthen over the coming 12 months, a Reuters poll showed on Friday, with analysts and economists expecting the Bank of Russia to raise interest rates in July and again later in the year as inflationary pressure intensifies.
U.S. markets will be closed on Tuesday for the nation’s Independence Day holiday.
Brent crude oil, a global benchmark for Russia’s main export, was up 0.9% at $75.35 a barrel.
Russian stock indexes were lower.
The dollar-denominated RTS index was down 1.1% to 982.4 points. The rouble-based MOEX Russian index was 0.4% lower at 2,781.9 points.
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