BLBG:Ruble Drops 1st Day In Three As Oil Slides, Japan Deficit Widens
The ruble depreciated against the dollar for the first time in three days as Brent crude declined and Japan’s trade deficit widened more than expected, cutting investor appetite for riskier assets.
The Russian currency weakened 0.4 percent versus the dollar to 31.8441 at 12:59 p.m. in Moscow and fell 0.4 percent against the euro to a three-week low of 39.7250. It slid 0.3 percent against the central bank’s currency basket, which is 55 percent dollars and 45 percent euros, to 35.3847.
Brent, the benchmark for Russian oil exports, declined 0.3 percent to $114.27 a barrel. Japan’s trade deficit widened to 517.4 billion yen ($6.5 billion) in July, compared with the 270 billion-yen median forecast of 28 analysts in a Bloomberg News survey.
“Lower oil drags the ruble down,” said Andrey Volkov, head of foreign exchange and money markets at ZAO Natixis Bank in Moscow. “Also, wider-than-expected trade deficit reported by Japan decreases investor appetite for risky assets including the ruble.”
Investors increased bets on the ruble weakening against the dollar, with non-deliverable forwards showing the currency at 32.3757 in three months versus 32.2558 on Aug. 21.
The extra yield investors demand to own Russia’s dollar bonds over U.S. Treasuries was unchanged at 214, according to JPMorgan Chase & Co.’s EMBI Global Index. Yields on the government’s ruble bonds due April 2021 rose 2 basis points to 7.85 percent, data compiled by Bloomberg show.
To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net
To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net
