Rouble falls from one-month high as rising COVID cases limit risk appetite

Credit: REUTERS/MAXIM SHEMETOV

The rouble weakened on Monday, pulling away from a one-month high as rising coronavirus cases around the world and opinion polls showing a solid lead for Democrat Joe Biden in the U.S. presidential election reduced appetite for Russian assets.

MOSCOW, Oct 26 (Reuters) - The rouble weakened on Monday, pulling away from a one-month high as rising coronavirus cases around the world and opinion polls showing a solid lead for Democrat Joe Biden in the U.S. presidential election reduced appetite for Russian assets.

At 0741 GMT, the rouble was 0.4% weaker against the dollar at 76.41 RUBUTSTN=MCX and had lost 0.2% to trade at 90.48 versus the euro EURRUBTN=MCX.

"Markets are under pressure as the epidemic in Europe continues and cases in the U.S. are rising. An additional factor of volatility is the approaching election in the United States and uncertainty over the timing of a new aid package for the country's economy," said Dmitry Gritskevich, an analyst at Promsvyazbank.

Russia reported a record daily rise in new COVID-19 infections on Monday.

Geopolitical risks, including political turmoil in neighbouring Belarus and continued fighting in the South Caucasus between Azeri and ethnic Armenian forces, also exerted pressure on the rouble.

Russia's central bank on Friday left its key rate unchanged at 4.25% and promised to increase its daily selling of foreign currency to the equivalent of 9.8 billion roubles ($128.2 million), according to Reuters calculations.

The bank, which reports its foreign currency sales with a two-day lag said it had sold 8.7 billion roubles worth of forex last Thursday.

"That is good news for the rouble, but today it looks overbought and succeeding in pushing below 76 to the dollar with such an external backdrop is hardly likely," said Alor Broker analyst Alexei Antonov.

Russian stock indexes were down, reflecting a 2.7% fall in the price of Brent crude oil to $40.64 per barrel LCOc1.

The dollar-denominated RTS index .IRTS was down 0.5% to 1,158.0 points. The rouble-based MOEX Russian index .IMOEX was 0.3% lower at 2,808.5 points.

For Russian equities guide see RU/EQUITY

For Russian treasury bonds see 0#RUTSY=MM

($1 = 76.4200 roubles)

(Reporting by Alexander Marrow; Editing by Kirsten Donovan)

((alexander.marrow@thomsonreuters.com; +7 495 775 1242;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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