Russian rouble slips on U.S.-China trade war uncertainty

Credit: REUTERS/MAXIM SHEMETOV

The Russian rouble slipped against the dollar on Friday over uncertainty surrounding the lingering trade war between Beijing and Washington and higher foreign currency purchases by the finance ministry.

MOSCOW, Nov 8 (Reuters) - The Russian rouble slipped against the dollar on Friday over uncertainty surrounding the lingering trade war between Beijing and Washington and higher foreign currency purchases by the finance ministry.

At 0730 GMT, the rouble was 0.3% weaker against the dollar at 63.74 RUBUTSTN=MCX and had lost 0.4% to trade at 70.42 versus the euro EURRUBTN=MCX.

China and the United States have been embroiled in a trade war for 16 months but hopes have grown that an initial deal could be signed soon.

Officials from both sides said on Thursday said they had agreed to roll back tariffs on each other's goods as part of the first phase of a trade deal, lifting market sentiment. But some experts have said this agreement could fall apart.

The rouble's potential to strengthen is also hindered by higher foreign currency purchases than expected by the finance ministry in the next month.

The Russian currency on Thursday received a boost after Central Bank Governor Elvira Nabiullina said there was room for monetary easing, cementing investor expectations of another imminent rate cut.

The central bank last month carried out its biggest rate cut in two years, slashing the key rate to 6.50% from 7% because of slowing inflation.

Brent crude oil LCOc1, a global benchmark for Russia's main export, was down 0.7% at $61.85 a barrel at 0646 GMT.

Russian stock indexes were also falling on Friday.

"We anticipate some profit taking in Russian equities today as uncertainty reemerges over whether an interim trade deal can be hammered out between Beijing and Washington next month, with reports off fierce opposition to talks of rolling back existing tariffs in the White House," Alfa Bank said in a statement.

The dollar-denominated RTS index .IRTS fell 0.7% to 1,475.92 points, while the rouble-based MOEX Russian index .IMOEX was 0.8% lower at 2,985.76 points.

The Moscow-listed shares of Russian aluminium giant Rusal RUAL.MM were down 4.4% on Friday morning after the company said it had posted a quarterly adjusted net loss of $34 million.

For Russian equities guide see RU/EQUITY

For Russian treasury bonds see 0#RUTSY=MM

(Reporting by Gabrielle Tétrault-Farber; Editing by Angus MacSwan)

((Gabrielle.Tetrault-Farber@thomsonreuters.com;))

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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