The ruble pared losses against the dollar, heading for a third consecutive day of gains, as oil advanced and investors bet Europe’s debt crisis will be contained, stoking appetite for riskier assets.
The Russian currency appreciated 0.2 percent to 31.5396 per dollar as of 12:45 p.m. in Moscow after falling 0.4 percent in earlier trading. The ruble was little changed at 39.1736 per euro and 34.9763 against the central bank’s target dollar-euro basket.
“The start of the week turned out to be more than positive for the ruble,” Dmitry Polevoy, a Moscow-based economist with ING Groep NV, wrote in a note. After strengthening beyond the 32 ruble-per-dollar level on Friday, the Russian currency had “no chance not to reach new short-term highs” amid rising oil prices, global optimism and excessive dollar supply from exporters, he said.
Oil added 0.2 percent to $92.37 per barrel in New York. Crude and natural gas contribute about 50 percent to Russia’s state revenue. German Chancellor Angela Merkel backed a bond-buying plan announced last week by the European Central Bank, a spokesman said yesterday, fanning speculation the monetary authority will cut borrowing costs for Spain and Italy.
Investors pared bets on the ruble weakening, with non-deliverable forwards showing the currency at 32.0234 per dollar in three months, compared with expectations of 32.0790 per dollar yesterday.