The ruble looked set to record its longest run of losses in nearly a month while bonds fell as the European Union considered imposing harsher sanctions on Russia over the Ukraine conflict.
The currency dropped 0.4 percent against the dollar to trade at 37.4425 as of 7:11 pm Moscow time, its sixth day of declines. The ruble touched a record-low of 37.51 on Monday. The currency also fell 0.3 percent to 49.08 per euro, its fifth day of losses.
Yield on 10-year ruble-denominated bonds advanced one basis point or 0.01 percentage point to 9.84 percent, the strongest level since Aug. 8. The Micex Index of stocks rose 0.6 percent to 1,400.35, after earlier retreating by up to 0.4 percent.
Ukraine, Europe and the U.S. claim that Russia is openly providing military assistance to Ukrainian separatists, with European Commission reportedly said to be drafting a fresh round of sanctions against Moscow. The ruble has dropped 4.3 percent since March, when Russia invaded Crimea, with the central bank raising borrowing costs 250 basis points in order to boost the currency since February.
“The ruble keeps trading detached from fundamental factors, driven by geopolitics and expected sanctions,” Dmitry Polevoy, a Moscow-based chief economist for Russia and Commonwealth of Independent States at ING Groep NV, told Bloomberg News.
U.S President Barack Obama is set to visit Estonia to reassure Baltic nations and warn Putin that NATO will provide military assistance to its members.
Meanwhile, South Korea’s won fell from its highest level in seven weeks against the dollar and a six-year high versus the yen after the Bank of Korea disclosed that it’s keenly tracking currency advances. The won dropped 0.5 percent to 1,018.25 per dollar at the close of trading in Seoul. It had earlier surged to 1,011.95, its highest level since July 10.To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Yashu Gola at email@example.com