Rouble firms on weak dollar amid uncertain global outlook

Credit: REUTERS/MAXIM SHEMETOV

The Russian rouble firmed on Monday against a weaker dollar but lost ground to the euro as uncertainty over the coronavirus pandemic and U.S.-China relations continued to plague global markets.

MOSCOW, July 27 (Reuters) - The Russian rouble firmed on Monday against a weaker dollar but lost ground to the euro as uncertainty over the coronavirus pandemic and U.S.-China relations continued to plague global markets.

At 0744 GMT, the rouble was 0.1% stronger against the dollar at 71.65 RUBUTSTN=MCX and had lost 0.3% to trade at 83.84 versus the euro EURRUBTN=MCX.

Brent crude oil LCOc1, a global benchmark for Russia's main export, was down 0.5% at $43.13 a barrel, retreating as rising coronavirus cases worldwide outweighed hopes of a successful vaccine.

The dollar crumbled on Monday amid doubts over the United States' economic recovery from the coronavirus pandemic and as investors increased bets the U.S. Federal Reserve could flag another accommodative shift in its outlook this week. L3N2EY17N

Tensions between Washington and Beijing continued to escalate as China took over the premises of the U.S. consulate in the southwestern city of Chengdu, in retaliation for China being ousted last week from its consulate in Houston, Texas, putting a strain on risk assets.

The weakening dollar was not cause to talk of growing risk appetite, said Andrei Kochetkov, leading analyst at Otkritie Brokerage, adding that markets might feel more confident if not for surging U.S.-China tensions.

The Bank of Russia on Friday cut its benchmark interest rate by 25 basis points to a record low of 4.25%, trimming the cost of borrowing amid waning inflation, in an effort to support the country's flagging economy, seen contracting by 4.5-5.5% this year, hit by low oil prices and the coronavirus.

Russian stock indexes were edging higher.

The dollar-denominated RTS index .IRTS was up 0.7% to 1,264.1 points. The rouble-based MOEX Russian index .IMOEX was 0.4% higher at 2,875.3 points.

For Russian equities guide see RU/EQUITY

For Russian treasury bonds see 0#RUTSY=MM

(Reporting by Alexander Marrow, editing by Ed Osmond)

((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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