The ruble strengthened, erasing earlier declines, as the euro rallied on speculation European Union finance ministers will make further progress on stemming the region’s debt crisis.
The ruble appreciated 0.2 percent to 30.8376 against the dollar at the close in in Moscow. The currency was little changed versus the central bank’s euro-dollar target basket and depreciated 0.2 percent against the euro to 40.3975.
The euro strengthened against the dollar to a six-week high, gaining as much as 0.4 percent, as EU finance ministers meet in Brussels today to discuss setting up a common bank supervisor. Greece yesterday offered to spend as much as 10 billion euros ($13 billion) to buy back bonds. Europe is Russia’s biggest trading partner.
“The ruble is following the euro rally,” Igor Akinshin, trader at Moscow-based Alfa Bank, said by phone.
The Russian currency declined earlier as oil, the country’s chief export earner, fell and concern the U.S. deficit will slow growth curbed investor appetite for riskier assets. President Barack Obama and Republican lawmakers are trading offers on ways to avoid the so-called fiscal cliff of more than $600 billion in spending cuts and tax increases for 2013.
“We expect the U.S. fiscal cliff to be solved by the year end and it will boost global sentiment,” Ivan Sinelnikov, an economist at OAO Gazprombank in Moscow, said by e-mail. “Russia will be among beneficiaries of that process,” said Sinelnikov, who sees the ruble at 30 to 30.5 against the dollar by the end of the year.
Non-deliverable forwards showed the ruble at 31.3025 per dollar in three months compared with 31.3290 yesterday.
The extra yield investors demand to own Russia’s dollar bonds over U.S. Treasuries rose two basis points to 191, according to JPMorgan Chase & Co.’s EMBI Global Index. An index of five-year government bond yields was little changed at 6.5228 percent.