BLBG:Ruble Rallies Most In Two Weeks As Oil Trades At 3-Month High
The ruble appreciated the most in more than two weeks against the dollar and gained versus the euro as oil traded at a three-month high.
The currency strengthened 0.8 percent versus the dollar to 31.8214 at 2:37 p.m. in Moscow, the most since Aug. 6. The ruble advanced 0.1 percent against the euro to 39.5290. The Russian currency gained 0.4 percent against the central bank’s currency basket, which is 55 percent dollars and 45 percent euros, at 35.2928.
Crude for September delivery rose as much as 82 cents to $96.76 in New York trading, the highest since May 11. Brent crude added 0.7 to $114.46 a barrel.
“The ruble strengthens on higher oil prices,” said Maxim Korovin, a Moscow-based analyst at VTB Capital. “Russian exporters are exchanging their dollars into rubles to pay taxes at the end of the month, which supports the ruble.”
Investors pared bets on the ruble weakening against the dollar, with non-deliverable forwards showing the currency at 32.3805 in three months versus 32.5800 on Aug. 20.
“The oil rally is speculative and not justified by fundamental demand and supply balance, and the Eurozone crisis hasn’t vanished,” Sergey Fishgoyt, deputy head of foreign exchange at Otkritie Financial Corp., said by telephone. “Therefore, the ruble may drop significantly within a month.”
The extra yield investors demand to own Russia’s dollar bonds over U.S. Treasuries fell five basis points to 214, according to JPMorgan Chase & Co.’s EMBI Global Index. Yields on the government’s ruble bonds due April 2021 were little changed today at 7.86 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
