September 4, 2019 / 2:19 PM / 2 months ago

UPDATE 1-Rouble recovers vs dollar from weakest since Feb

(Updates prices, adds detail)

MOSCOW, Sept 4 (Reuters) - The Russian rouble firmed on Wednesday, moving off its weakest level since mid-February hit the day before, drawing support from demand related to government bond auctions, as well as from a globally weaker dollar.

The currency rose from its lowest point since Feb. 14 of 67.14 against the U.S. dollar, a level it briefly touched on Tuesday, moving in line with other emerging market currencies.

At 1335 GMT, the rouble gained 0.8% to 66.19 against the dollar, its strongest since Aug. 27.

The rouble gained ground amid the weakening dollar on the back of market expectations of more rate cuts in the United States before the end of 2019 after disappointing manufacturing data.

Versus the euro, the rouble had gained 0.4% to trade at 72.94.

The rouble also received support from a weekly auction of OFZ government bonds held by the finance ministry. Demand for these bonds is usually seen as a gauge of investors’ sentiment towards Russian assets.

The ministry sold 20 billion roubles ($303.05 million) worth of OFZ bonds, while demand totalled 61.1 billion roubles.

“We didn’t expect the auction to be nowhere near as strong as the actual outcome,” Rosbank analysts said.

“Clearer signs of economic weakness in the U.S. and softer base rates triggered the move, as investors rushed to add Russian duration via non-competitive orders.”

Prices for oil, Russia’s main export, rose, boosted by a wider market pickup on positive news from China’s services sector, after three days of losses due to fears about a weakening global economy.

Brent crude oil, a global benchmark, was up 2.8% at $59.89 a barrel.

The dollar-denominated RTS index was up 1.9% to 1,328 points. The rouble-based MOEX Russian index was 0.7% higher at 2,793 points.

Shares in Russian steel producer Mechel outperformed, rising nearly 4% after the head of Russian bank VTB said the lender would discuss a debt restructuring request from the company.

Shares in VTB, Russia’s second-largest bank, gained 8.5% after Russian media reported the bank plans to return to 50% dividend payout ratio after 2019.

For Russian equities guide see

For Russian treasury bonds see

$1 = 65.9950 roubles Reporting by Anna Rzhevkina, additional reporting by Vladimir Abramov Editing by Andrey Ostroukh, William Maclean

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