MOSCOW, Aug 27 (Reuters) - The Russian rouble firmed on Thursday, reviving from its lowest since early 2016 against the euro, as traders braced for possible fallout from an opposition leader's alleged poisoning and the crisis in Belarus and awaited the U.S. Fed's monetary outlook.
At 0741 GMT, the rouble was 0.3% stronger against the dollar at 75.17 RUBUTSTN=MCX, moving from a level of 76.0025 hit in volatile trade on Wednesday, its weakest since April.
Versus the euro, the rouble gained 0.3% to trade at 88.97 EURRUBTN=MCX, up from Wednesday's low of 89.8050, a level last seen in February 2016. It had been as strong as 70-per-euro in early-2020.
The currency crashed this week as concern grew that Moscow's ties with the West may deteriorate if it intervenes in the crisis in neighbouring Belarus.
Adding to the pressure on the rouble and fuelling concerns about more sanctions, the Kremlin has also declined for now to investigate the circumstances surrounding the sudden illness of the opposition politician Alexei Navalny, which German doctors said could be from poisoning.
"It is worth noting that, despite making political noises, western countries have not really imposed sanctions on Russia for persecution of domestic Kremlin critics," Tatha Ghose at Commerzbank in London said.
"While some caution may be prudent when it comes to the rouble, the base-case assumption is that the risk spike will fade in coming months, with the higher oil price then having a positive impact on the exchange rate."
The market focus is expected to shift to Fed Chair Jerome Powell's address at the Jackson Hole summit at 1310 GMT, when he is to present the Fed's monetary policy outlook.
On the stock market, the dollar-denominated RTS index .IRTS was up 0.4% to 1,277.8 points but the rouble-based MOEX Russian index .IMOEX slid 0.1% to 3,049.3 points.
For Russian equities guide see RU/EQUITY
For Russian treasury bonds see 0#RUTSY=MM
(Reporting by Andrey Ostroukh in Moscow and Karin Strohecker in London; editing by Barbara Lewis)
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