Ruble Set for Longest Streak of Declines Since December on Fed

  • Crude, Russia’s main export earner, set for lowest in week
  • Eurobonds climb as government markets new foreign debt issue

The ruble fell for a fifth day with oil, set for the worst streak of losses this year, as investors cut their holdings of riskier emerging-market assets on mounting speculation the U.S. will raise interest rates.

The ruble weakened as much as 0.5 percent and traded down 0.1 percent at 66.8470 as of 5 p.m. in Moscow, a 3.2 percent decline in the past five days. Crude oil fell as much as 1.1 percent to $47.80 per barrel.

A gauge of emerging-market currencies has retreated this month as the Federal Reserve positions itself to raise U.S. borrowing costs as soon as in June. Oil’s decline of 2.4 percent from a six-month high on May 17 amid a continued global supply glut has also helped pare the ruble’s second-best performance in emerging markets this year.

"The market is jittery on renewed expectations of Fed rate hikes,” Vladimir Miklashevsky, a senior strategist at Danske Bank A/S in Helsinki said by e-mail. “The oil and the ruble are equally sensitive to this risk-off environment."

The government’s dollar Eurobond due in September 2023 climbed for the first time in six days, lowering the yield nine basis points to 3.94 percent. Russia is still accepting bids for its first Eurobond placement since 2013, according to people familiar with the matter who weren’t authorized to discuss the deal publicly.

Russian government ruble bonds traded little changed, with the yield on a 10-year note at 8.9 percent. The Micex index of stocks gained 0.8 percent to 1,883.97.

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