Market News

Rouble recovers from near 15-month low, traders focus on Ukraine tensions - REUTERS

JANUARY 27, 2022

MOSCOW, Jan 27 (Reuters) - The rouble clawed back some ground on Thursday, gaining over 1% against the dollar and pulling clear of the near 15-month low hit in the previous session, as escalating tensions over Ukraine continued to dictate activity on volatile Russian markets.

The rouble plunged to its lowest since early November 2020 on Wednesday before cutting some of the losses, as the United States said it had set out a diplomatic path to address sweeping Russian demands in eastern Europe. read more

By 0908 GMT, the rouble was 1% stronger against the dollar at 78.62 , recovering all of Wednesday's losses. It had dived to 80.4125 in the previous session. Against the euro, the rouble had gained 1.5% to 88.05 .

Already gaining on the day, the trigger for a sharp rise in the rouble may have been Belarus saying Russian troops would leave its territory once military drills, scheduled to end in February, are over, market participants said. read more

"There was already active dollar selling since this morning, but the news from Belarus accelerated this process," said a dealer at a large Russian bank.

The rouble outperformed other emerging market currencies, which were down against a stronger dollar, resurgent after U.S. Federal Reserve Chairman Jerome Powell on Wednesday surprised investors by leaving the door open to larger and faster-than-expected interest rate hikes. read more

"We note that the rouble now looks markedly oversold, which despite the negative background, may affect a sharp recovery in the rouble's position," Promsvyazbank analysts said in a note.

Volatility has plagued Russian markets in recent weeks amid Western fears Russia is poised to invade neighbouring Ukraine, something Moscow has repeatedly denied. The West has threatened sanctions with profound economic effects if Russia does make an incursion. read more

British Prime Minister Boris Johnson said he was discussing banning Russia from the SWIFT global payment system with the United States, one of the harshest measures being considered. read more

Brent crude oil , a global benchmark for Russia's main export, was down 0.5% at $89.55 a barrel, not far from a more than seven-year high.

Russian stock indexes continued their recovery after a massive sell-off on Monday.

The dollar-denominated RTS index (.IRTS) was up 3.3% at 1,367.4. The rouble-based MOEX Russian index (.IMOEX) was 1.7% lower at 3,415.1.

The market rout has put some doubt over prospects for Russian initial public offerings this year. read more

Reporting by Alexander Marrow; additional reporting by Vladimi Abramov; Editing by Rashmi Aich and Subhranshu Sahu


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