Rouble climbs to strongest since June after US jobs data

03 Sep, 2021

MOSCOW: The rouble firmed on Friday after data showed US job growth slowed more than expected in August, shrugging off domestic news on the finance ministry's plan to increase state purchases of foreign currency.

The US jobs data will be parsed by investors trying to gauge the timing of the Federal Reserve's announcement on when it will start scaling back its massive monthly bond buying program.

Sberbank CIB, before the data release, said the weaker-than-expected numbers should result in the dollar retreating globally, "as the Fed would be more likely in this case to postpone the QE tapering until the end of the year."

At 1240 GMT, the rouble gained 0.2% to 72.73 against the dollar after briefly touching its strongest level since June 29 of 72.55.

Versus the euro, the rouble added 0.1% to 86.40.

The rouble showed muted reaction to the finance ministry's plan to increase daily FX buying for the state reserves to around $205 million from $198 million in the coming month.

The finance ministry's FX interventions are designed to shield the rouble from fluctuations in oil prices but they limit the currency's ability to take advantage of positive developments and strengthen.

The rouble could get extra support from the central bank if it raises rates next week in an attempt to rein in high consumer inflation.

"We continue to expect another 50bp hike in September, but this will likely be the end of the cycle," JP Morgan said in a note.

A Bank of Russia official said the bank will consider the need for a key rate increase at the Sept. 10 meeting, reiterating the bank's wording from its last statement from July when it raised the rate sharply by 100 basis points to 6.5%.

Brent oil, the global benchmark for Russia's main export, was up 0.6% at $73.48 a barrel but did not help Russian stock indexes to advance further.

The dollar-denominated RTS index shed 0.2% to 1,723.2 points. The rouble-based MOEX Russian index was 0.3% lower at 3,977.2 points, heading away from an all-time high of 3,994.77 it reached on Thursday.

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