Oil price increase helps rouble recovery

Mar 23rd, 2010 | By | Category: Rouble News

With oil prices rising back above the US$80 mark today, the rouble recovered almost half of the losses it made on Monday.

Dealers are warning, however, that it may take time for the currency to recover the same degree of momentum it has experienced recently.

At 9am this morning, the rouble was trading at 34.14 versus the euro-dollar basket, regaining almost half of the one per cent loss of yesterday – the steepest loss the currency has undergone since late last year. Yesterday’s losses were due to a fall in the price of oil, which sparked a profit-taking surge.

Vasiliy Ushakkov, a dealer at Investbank, explained today’s recovery: “Short-covering goes on but at lower levels as oil is back above $80”. Yesterday futures for Brent crude oil fell to US$78 per barrel.

Today’s gains have shifted the rouble back towards the boundary of the Russian central bank’s floating trading band, currently at 33.90-36.90.

The rouble is up about 15 kopeks against the dollar, at 29.47. It is also up 11 kopeks against the euro, at 39.84.

Ushkov commented that betting on the rouble strength could resume as “it is the most attractive way to earn.”

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