BLBG:Ruble Declines to Week Low on European Growth Concern, Lower Oil
The ruble fell to the lowest level in more than a week against the dollar as oil declined for a second day and concern deepened European economies are slowing.
Russia’s currency lost 0.5 percent to 28.9889 per dollar as of 2:38 p.m. in Moscow, heading for the weakest closing level since Aug. 23.
The euro depreciated against 14 of its 16 major peers as a report showed European manufacturing contracted more than initially estimated in August and investors speculated the European Central Bank was supporting the debt market. Crude futures lost 0.4 percent to $88.45 a barrel in New York.
“Weak data this morning and rumors regarding renewed ECB bond purchases are weighing on the euro,” Carolin Hecht, a currency strategist at Commerzbank AG in Frankfurt, said by e- mail. “Oil prices are edging lower, but this is not affecting the ruble too much.”
The ECB bought Italian securities today, according to two people with knowledge of the transactions, who declined to be identified because the purchases are confidential. A spokesman for the ECB declined to comment.
Investors increased bets the ruble will weaken with non- deliverable forwards showing the currency at 29.3067 per dollar in three months, compared with 29.3025 yesterday. The contracts provide a guide to expectations of currency movements and interest-rate differentials and allow companies to hedge against currency shifts.
Worst Performer
The ruble depreciated 4.2 percent against the dollar in August, the worst performance among its three peers in the so- called BRIC group of emerging-market countries. Brazil’s real fell 2.5 percent against the greenback, India’s rupee slipped 4.1 percent and China’s yuan appreciated 0.9 percent.
The ruble was 0.3 percent stronger at 41.435 per euro, leaving it steady at 34.5943 against the central bank’s target dollar-euro basket.
Russia’s dollar bonds due 2020 rose for a sixth day, pushing the yield down six basis points, or 0.06 percentage point, to 4.15 percent. The country’s ruble Eurobond yielded two basis points more than yesterday, at 6.925 percent.
To contact the reporter on this story: Jack Jordan in Moscow at jjordan22@bloomberg.net
To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net
