The Ruble Strengthened to A Five-Week High
The ruble strengthened to a five-week high near 60 versus the dollar, as oil prices rose from a two-week low and the US currency fell across the board due to slowing US inflation data.
Oil, Russia’s main export, rose sharply on hopes of easing COVID restrictions in top crude oil importer China, with Brent trading up 2.4713% to $95.982 per barrel by 0730 GMT.
The Russian currency will benefit from a new fiscal period starting next week when exporters will convert some of their foreign exchange earnings into rubles.
The ruble was the last trading at 60.18 per dollar, up 0.59%. The ruble was trading flat against the euro at 61.35. According to Promsvyazbank analyst Egor Zhilnikov, the ruble may break through the 60 mark against the dollar, and no visible factors are holding it back.
Russian stocks were higher, with the dollar-denominated RTS index (.IRTS) up 1.14% to 1,163.54. The rubles’ MOEX Russian index (.IMOEX) rose 0.59% to 2,223.05.
Eurozone bond yields rose slightly on Friday after falling a day earlier as US inflation data showed signs of cooling, supporting views that the Fed will slow its pace of tightening in December.
Germany’s 10-year yield rose 4.5 basis points to 2.051% after falling 17.5 basis points on Thursday.
The 2-year yield increased 6.5 basis points to 2.038% on Friday after falling 14.5 basis points on Thursday.
Meanwhile, ECB policymaker Joachim Nagel told banks to start shrinking their balance sheets by raising interest rates to curb inflation in the euro zone.
The outlook for Italian bonds was less favorable because the ECB was expected to formalize plans to sell a portion of its bond holdings next year, a process known as quantitative tightening.
