Russian ruble close to 2-week high against dollar, with focus on Ukraine


MOSCOW, Feb 2 (Reuters) – The ruble strengthened on Wednesday to a nearly two-week high near 76 against the dollar, but remained sensitive to tensions over Ukraine, with Russia showing no signs of backing down in the face of the security demands it has made. the west.

The ruble is moving away from a nearly 15-month low at 80.4125 against the greenback hit last week when it was battered by fears that Russia is planning to invade neighboring Ukraine, which Moscow has repeatedly denied it, and Western threats to impose new sanctions on Russia if it makes an incursion.

At 09:41 GMT, the ruble was up 0.6% against the dollar at 76.32, earlier touching 76.25, its strongest point since January 20. It had gained 0.4% against the euro to 86.09, close to its highest in three weeks.

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Russian President Vladimir Putin on Tuesday accused the West of deliberately creating a scenario designed to draw him into war and ignoring Russia’s security concerns over Ukraine, after senior diplomats in Moscow and Washington have spoken. Read more

“On the geopolitical front, the market welcomes continued negotiations, but risk remains,” BCS Global Markets said in a note. “Optimism will likely be capped until concrete action is taken.”

In a sign that market sentiment was normalizing, the Finance Ministry will resume weekly OFZ government bond auctions this week after canceling them for the past two weeks amid the ruble crash. The ministry will hold an auction later on Wednesday.

The resumption of OFZ auctions could support the rouble, said analysts at Promsvyazbank, who expect the currency to continue to strengthen towards the 76 mark against the greenback on Wednesday.

Expectations of a rate hike by the central bank next week are also positive for the ruble’s short-term outlook, said Dmitry Polevoy, chief investment officer at Locko Invest, anticipating a gradual move of the ruble into the 75 range, 5-76 against the dollar.

Analysts polled by Reuters expect the bank to raise its benchmark rate by 100 basis points to 9.5% on Feb. 11, to tackle stubbornly high inflation. Read more

Brent crude oil, a global benchmark for Russia’s top export, rose 0.4% to $89.48 a barrel, near levels last seen in late 2014.

Russian stock indexes were mixed.

The dollar-denominated RTS index (.IRTS) rose 0.3% to 1,462.1 points. Russia’s rouble-based MOEX index (.IMOEX) was down 0.2% at 3,541.9 points, but not far from a more than two-week high of 3,584.71, reached during the previous session.

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Reporting by Alexander Marrow Editing by Andrew Heavens and Mark Potter

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