Ruble Drops for Longest Streak in 6 Weeks as OPEC Pact Hits Snagby
Key OPEC members dispute estimates of how much they’re pumping
Yields on 5-year notes reach highest level since Aug. 24
The ruble fell for a third day, the longest losing streak in six weeks, as concern about OPEC’s ability to follow through with productions cuts and speculation the Federal Reserve will raise rates this year curbed appetite for Russian assets.
The currency weakened 0.5 percent to 63.335 against the dollar by 5:42 p.m. in Moscow, down 2.1 percent over the past three days for the longest period of declines since Sept. 1. Bonds fell, pushing five-year yields to 8.72 percent, the highest level since Aug. 24. Oil declined 1.1 percent to $51.26 per barrel.
Initial euphoria that boosted Russian assets following an agreement by Organization of Petroleum Exporting Countries to limit supply has faded as disputes emerge among members about how to share the reductions. The ruble was also caught in a broader selloff as minutes of the Fed meeting released Wednesday signaled greater consensus for a rate rise this year among policy makers.
“There are no reasons for the ruble to strengthen,” said Artem Roschin, a currency trader at Aljba Alliance LLC in Moscow. “People no longer expect oil to rise significantly on the OPEC deal, everyone is waiting for the Fed to hike rates."
Even after three days of declines, the ruble’s 3.1 percent gain over the past month is the biggest among major currencies behind Brazil’s real. Russian equities dropped 1.1 percent to 1,971.59, the second day of declines.