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Markets

Russian rouble firms vs dollar to strongest level since early March

Oil prices rose on Thursday, erasing earlier losses, on signs US gasoline demand is rising despite a big surprise b
28 May 2020
  • Oil prices rose on Thursday, erasing earlier losses, on signs US gasoline demand is rising despite a big surprise build in crude inventories and worries that China's new Hong Kong security law could result in trade sanctions.
  • Brent crude oil, a global benchmark for Russia's main export, was up 2.2% to $35.49 a barrel.

MOSCOW: The Russian rouble gained in afternoon trade on Thursday, buoyed by higher oil prices and pricing in the globally weaker US dollar.

At 1802 GMT, the rouble was 0.9% stronger against the dollar at 70.37, a level last seen in early March. Against the euro, the rouble firmed 0.2% to 77.99 .

Oil prices rose on Thursday, erasing earlier losses, on signs US gasoline demand is rising despite a big surprise build in crude inventories and worries that China's new Hong Kong security law could result in trade sanctions.

Brent crude oil, a global benchmark for Russia's main export, was up 2.2% to $35.49 a barrel.

Oil prices saw support from Saudi Arabia's and other OPEC producers' plans to extend record high output cuts until the end of 2020, an initiative that has not yet won support from Russia.

If global oil output cuts stay at 9.7 million barrels per day after June, that could support the rouble, Nordea Bank analysts said.

Since the fall in oil prices in early March, the rouble has been getting support from the central bank's daily sales of foreign currency. The bank said on Thursday it had sold $159 million worth of foreign currency on May 26.

The central bank is likely to cut rates next month to support the economy, hit hard by low oil prices and the coronavirus pandemic, which has infected nearly 380,000 people in the country.

Russian stock indexes ended the day higher. The dollar-denominated RTS index was up 2.4% at 1,241.8 points. The rouble-based MOEX Russian index was 1.4% higher at 2,779.98 points.