MOSCOW (Dow Jones)--The Russian ruble strengthened 1% against the dollar in early trading Monday, moving higher on a rise in oil prices and end-of-the-month tax payments from exporters.
The ruble traded at RUB30.77 against the dollar at 10:28 GMT. Against a basket of dollars and euros, Russia's currency traded at RUB36.27, 0.6% stronger.
Prices for Brent crude hovered near $111 per barrel, a gain of around 1%.
-By Ira Iosebashvili, Dow Jones Newswires; +7 495 232-9192, ira.iosebashvili@dowjones.com
MOSCOW (Dow Jones)--The Russian ruble shot higher against the dollar Monday, as risk sentiment returned to emerging markets amid hopes of a European debt deal and oil prices strengthened.
While a definitive solution has still not been reached, European leaders made progress in shaping a joint response to the continent's sovereign debt crisis and said they would present a complete plan at a Wednesday summit meeting.
"Few investors actually believe that the measures currently proposed by the EU leaders represent a long-term solution," Chris Weafer, chief strategist at Troika Dialog, wrote in a note to investors. "But, as demonstrated in early October, that concern should not prevent an extended global rally over the short-term if the newsflow justifies it."
The ruble traded at RUB30.80 against the dollar at 09:34GMT, stronger by nearly 1%. Against a basket of dollars and euros, Russia's currency traded at RUB36.20, 0.8% stronger.
Part of the upward move may also be coming from market players taking advantage of oversold conditions last week, traders said.
"Last week we weakened on very little volume and for no real reason," said Roman Pokhomenko, a dealer at Lanta Bank. "It tempted some people to make a bet because the levels were pretty attractive."
Prices for oil--Russia's chief export--were nearly 1% higher, hovering around $110 per barrel for Brent crude, further buoying the ruble. Another boost may have come from the end of the month tax period, where exporters sell dollars and euros and buy the local currency.
Further upside for the ruble, however, may be limited in the absence of a spike in oil prices or concrete steps to solve the euro-zone crisis, traders said.
"We have backed off from levels versus the basket where the central bank begins to heavily intervene. But there's nothing to take the ruble past RUB36 either, at the moment," a trader at a large Russian investment bank said.
Russian stocks rallied as well, with the benchmark Micex index climbing 1% to 1461.27.
-By Ira Iosebashvili, Dow Jones Newswires; +7 495 232-9192, ira.iosebashvili@dowjones.com
