Ruble Drops Second Day as Crude Oil Retreats on Economic Woes

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The ruble retreated for a second day as crude, Russia’s biggest revenue-earner, dropped on concern economic growth is flagging.

The ruble lost 0.2 percent to 31.4190 per dollar by the close in Moscow, extending its weekly decline to 1.8 percent. The currency gained 0.1 percent to 40.5925 against the euro and was little changed as 35.5471 versus the central bank’s euro-dollar basket.

Oil sank 0.4 percent to $85.69 a barrel in New York by the close of currency trading in Moscow on speculation U.S. economic growth won’t be enough to boost demand. In Europe, Spain’s unemployment rate rose in the third quarter. Investors pulled $32 million from Russia-focused equity funds in the seven days through Oct. 24, the third week of outflows, analysts at UralSib Capital wrote in an note, citing EPFR Global data.

“There’s a negative mood in general and that’s affecting all risky assets,” Vyacheslav Smolyaninov, deputy head research at UralSib Capital, said by phone today. “Macroeconomic problems in Europe continue, the recession is deepening.”

Non-deliverable forwards showed the ruble at 31.8850 per dollar in three months.

The extra yield investors demand to own Russia’s dollar bonds over U.S. Treasuries rose three basis points to 181, according to JPMorgan Chase & Co.’s EMBI Global Index. An index of five-year government bond yields added three basis points to 7.12 percent.

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