October 11, 2019 / 8:41 AM / 2 months ago

Rouble touches two-week high on hopes about U.S.-China trade talks

MOSCOW, Oct 11 (Reuters) - The Russian rouble strengthened to a two-week high against the U.S. dollar on Friday, lifted by rising risk appetite globally on hopes the United States and China may find a way to de-escalate a protracted trade dispute.

The rouble gained 0.4% to 64.20 versus the dollar as of 0806 GMT, its strongest level since Sept. 26.

Versus the euro, the rouble gained 0.3% to 70.70 , a level last seen on Oct. 1.

The rouble may test the 64 mark versus the dollar if Friday’s meeting between U.S. President Donald Trump and Chinese Vice Premier Liu He provides positive news, Nordea Bank analysts said in a note.

The Russian rouble is currently the third best-performing currency here versus the dollar this year after the Ukrainian hryvnia and the Egyptian pound.

The rouble could also draw support from investors in Russian OFZ treasury bonds as prices are expected to rise, moving inversely with their yields which are set to fall along with the central bank’s key interest rate.

Central bank Governor Elvira Nabiullina sent a dovish signal to the market on Thursday, hinting that the bank could cut its key rate, now at 7%, again as soon as this month.

“Doubts about a rate cut at the Oct. 25 meeting have been fully dispelled,” Rosbank analysts said in a note.

Yields on Russia’s 10-year OFZ bonds fell to 6.66% on Friday, their lowest since May 2013.

Global oil prices played on the upside for Russian assets. Brent crude oil, a benchmark for Russia’s main export, was up 2.2% at $60.42 a barrel, its highest level this month.

The dollar-denominated RTS share index was up 0.6% at 1,338.4 points. The rouble-based MOEX Russian index was 0.3% higher at 2,728.4 points.

For Russian equities guide see

For Russian treasury bonds see

Reporting by Andrey Ostroukh; Editing by Susan Fenton

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