MOSCOW: The Russian rouble regained ground on Tuesday, after falling sharply the day before to its weakest levels in three months, as emerging market currencies pared losses following a further escalation of the China-U.S. trade dispute.
The rouble was 0.5% stronger against the dollar at 65.19 by 0720 GMT, having touched its lowest level since May 3 of 65.61 late on Monday.
Versus the euro, the rouble gained 0.5% to trade at 73.0 after falling to its lowest level since mid-June of 73.49.
The rouble took a hit after China let its currency, the yuan, to weaken past the 7-per-dollar level for the first time in more than a decade
Washington labelled Beijing a currency manipulator for this move, marking a sharp escalation in trade tensions between the United States and China.
"The dynamics of the Chinese currency could become some sort of a marker for further dynamics in emerging market currencies," Mikhail Poddubsky, an analyst at Promsvyazbank, said.
In the near term, the rouble is likely to stabilise around 65.5 against the dollar, Poddubsky said.
In Russia, the theme of sanctions remained in focus but concerns about the new restrictions have eased after the market took a closer examination of the new restrictions that Washington imposed against Moscow.
Russian stock indexes traces oil prices higher. Prices for crude, Russia's main export, rose on Tuesday. Brent futures, were up 0.75% at $60.26 a barrel.
The dollar-denominated RTS index was up 0.7% to 1,290 points. The rouble-based MOEX Russian index was 0.8% higher at 2,670 points.
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