Russian rouble soars as US banking intervention hurts dollar
"The key event of the week is Friday's central bank rate decision, where we do not expect to change, with the hawkish rhetoric to remain," said Dmitry Polevoy, head of investment at Locko-invest
The Russian rouble shrugged off slumping oil prices to rise sharply against the dollar on Monday as US authorities launched emergency measures to shore up confidence in the banking system after a bank failure.
The US dollar fell as authorities stepped in to cap the fallout from the sudden collapse of Silicon Valley Bank SIVB.O, with investors hoping the Federal Reserve will take a less aggressive monetary path.
By 1427 GMT, the rouble was 1.4% stronger against the dollar at 75.53 RUBUTSTN=MCX, hitting a near two-week high.
It had gained 0.8% to trade at 80.34 versus the euro EURRUBTN=MCX and had firmed 0.5% against the yuan to 10.91 CNYRUBTOM=MCX.
"The dollar is weakening on rising expectations that problems in the US banking system may halt the Federal Reserve's tightening cycle," said Andrei Kochetkov of Otkritie.
The rouble
The rouble was at its strongest against the dollar in almost a week. A drop in oil prices late last week and data detailing Russia's shrinking current account surplus had put pressure on the currency.
"The key event of the week is Friday's central bank rate decision, where we do not expect (the rate) to change, with the hawkish rhetoric to remain," said Dmitry Polevoy, head of investment at Locko-Invest.
Analysts polled by Reuters widely expect the bank to hold its key interest rate at 7.5% before possibly hiking the cost of borrowing later this year.
Brent crude oil LCOc1, a global benchmark for Russia's main export, was down 2.4% at $80.8 a barrel, earlier clipping a more than two-month low.
Russian stock indexes were mixed.
The dollar-denominated RTS index .IRTS was up 0.5% to 947.7 points. The rouble-based MOEX Russian index .IMOEX was 0.8% higher at 2,258.4 points.
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