Rouble firms on U.S. stimulus hopes, but COVID risks heighten

Credit: REUTERS/MAXIM SHEMETOV

The rouble firmed slightly on Monday, boosted by optimism that U.S. lawmakers could soon reach an agreement over fiscal stimulus measures, even as rising COVID-19 cases at home and abroad continued to weigh on Russian assets.

Updates prices, adds analyst comment

MOSCOW, Oct 19 (Reuters) - The rouble firmed slightly on Monday, boosted by optimism that U.S. lawmakers could soon reach an agreement over fiscal stimulus measures, even as rising COVID-19 cases at home and abroad continued to weigh on Russian assets.

By1305 GMT, the rouble was 0.2% stronger against the dollar at 77.75 RUBUTSTN=MCXbut had lost 0.4% to 91.59 versus the euro EURRUBTN=MCX.

"We expect trading in the range of 77-78.5 versus the dollar this week," said Dmitry Polevoy, head of investment at Locko Invest, pointing out that upcoming month-end tax payments could support the rouble and that any positive news might cause the Russian currency to strengthen markedly.

Tax payments usually support the rouble as export-focused companies convert their foreign currency revenues to meet local liabilities.

Geopolitical risks were weakening, said Andrei Kochetkov of Otkritie Brokerage. However, the threat of more restrictions linked to the coronavirus outbreak lingered.

The European Union and Britain last week imposed sanctions against some top Russian officials over the poisoning of Kremlin critic Alexei Navalny. A political crisis in neighbouring Belarus and military conflict in the South Caucasus have also weighed on Russian assetsin recent weeks.

"Optimism is fading as round two of COVID ramps up and the consequent shuttering of economies begins," said BCS Global Markets in a note.

Global cases showed a record one-day increase of more than 400,000 late last week, with much of Europe bringing in new restrictions. But in Moscow, the mayor said there were signs authorities were getting the outbreak under control, even as nationwide new cases hit a record daily high of 15,982 on Monday. [nR4N2H603B]

U.S. House Speaker Nancy Pelosi said on Sunday she was optimistic that legislation on a wide-ranging coronavirus relief package could be pushed through before the Nov. 3 presidential election, supporting riskier assets.

Brent crude oil LCOc1, a global benchmark for Russia's main export, was down 0.4% at $42.74 a barrel.

Russian stock indexes were marginally lower, hovering near month-long lows hit on Friday.

The dollar-denominated RTS index .IRTS was down 0.2% to 1,131.0 points. The rouble-based MOEX Russian index .IMOEX was 0.3% lower at 2,791.1.

(Reporting by Alexander Marrow; Editing by Andrew Cawthorne and Alex Richardson)

((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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