Ruble Drops First Time in Three Days on Syria Strikes, Lower Oil

Who Is Russia Really Targeting in Syria?

The ruble fell for the first time in three days, erasing earlier gains, as an oil rally faded and investors speculated Russian air strikes in Syria may escalate tension with the U.S.

The currency of the world’s biggest energy exporter slid 0.2 percent to 65.4970 against the dollar as of 5:58 p.m. in Moscow, while the Micex Index of stocks fell 1.4 percent.

Russia carried out four air strikes on Islamic State targets overnight, raising the risk of accidents between Russian and U.S. jets, who are sharing airspace as they bomb targets in Syria. Brent crude fell 0.2 percent, erasing a gain of as much as 3 percent that was driven by the latest oil production statistics from the U.S. and OPEC showing output contracting.

At the "key" level of 65 per dollar, the ruble "is at a cross-roads," Tom Levinson, a foreign currency and rates strategist at Sberbank CIB in Moscow, said by e-mail. The ruble’s recent resilience is “somewhat at odds” with “rising uncertainty related to Syria and an oil price stuck below $50 per barrel," he said.

Government bonds rose, pushing the yield on the five-year note down 12 basis points to 11.3 percent. Brent fell 0.2 percent to $48.27 a barrel on the London-based ICE Futures Europe exchange.

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