MOSCOW, July 29 (Reuters) - The Russian rouble firmed against a weakened U.S. dollar on Wednesday, recovering from the two-month low it hit in the previous session as investors awaited the U.S. Federal Reserve’s monetary policy decision.
At 0730 GMT, the rouble was 0.5% stronger against the dollar at 72.27 and had gained 0.2% to trade at 84.90 versus the euro.
The Federal Reserve later on Wednesday is expected reiterate its dovish stance and could signal a move towards an average inflation target, which would allow rates to stay lower for longer.
The rouble received a slight boost from oil prices, which climbed on Wednesday after a surprise drop in U.S. crude inventories offset concerns about the recovery of fuel demand as some U.S. states reported record daily increases in COVID-19 infections.
Brent crude oil, a global benchmark for Russia’s main export, was up 0.7% at $43.51 a barrel by 0743 GMT.
Russia’s finance ministry is also set to auction two series of OFZ treasury bonds maturing in 2026 and 2025, setting the overall amount on offer for the five-year bond at 30 billion roubles ($414 million).
Demand for these bonds, which has been stable among foreign investors in recent months, serves as a gauge of global market sentiment towards Russian assets.
The rouble earlier this week lost the support it had received from month-end taxes, which usually prompt export-focused companies to convert their foreign currency to meet local duties.
Russian stock indexes were trading higher.
The dollar-denominated RTS index was up 0.9% to 1,268.6 points. The rouble-based MOEX Russian index was 0.3% lower at 2,904.1 points.
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$1 = 72.4000 roubles Reporting by Gabrielle Tétrault-Farber; Editing by Mark Potter