Rouble falls after Moscow blasts

Mar 30th, 2010 | By | Category: Rouble News

The rouble came under pressure on Monday following two bomb blasts on the Moscow underground system, which sparked risk aversion amongst traders and increased demand for perceived safer assets, including dollars.

The explosions happened during rush hour on two packed Moscow trains, killing at least 37 commuters and wounding 33.

In early morning trading, the rouble was at 34.20 versus the euro-dollar basket, a fall of 7 kopecks. This brought the rouble to its lowest level since March 10th.

According to Roman Pakhomenko, a dealer at Lanta Bank, “Blasts are the new theme, it will seriously affect the market.”

Another dealer at a major Moscow bank was quoted as saying: “It is a psychological moment. The sentiment is very bad, a lot of uncertainty. The market was overshort (in foreign currencies) so the reaction is explainable.”

Dealers have said that the euro and the dollar had been oversold against the rouble, which had been strengthening its position for weeks now.

The rouble lost 17 kopecks against the dollar and 14 kopecks against the euro.

Despite this setback, the external background for the rouble remains largely positive, with oil prices remaining at approximately $80 per barrel.

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