The ruble extended its gains for the second straight day on reports that Ukraine and Russia were edging closer to reaching a deal to end the violence in talks mediated by France and Germany.
The Russian currency surged 0.1 percent to trade at 34.2445 per dollar in midday trading in Moscow. Yields on bonds that mature in February 2027 plunged two basis points to 8.52 percent. The ruble advanced 0.2 percent versus the euro to 46.7495. The Russian currency has lost 4 percent of its value versus the U.S. dollar in 2014, according to Bloomberg News.
“Yesterday’s four-party meeting seemed to end on a positive note,” Arko Sen, a London-based strategist at Bank of America wrote to Bloomberg.
Sen also pointed to stronger economic reports as one of the reasons behind ruble’s rally. The Russian services sector purchasing managers’ index for June surged to 49.8 from May’s reading of 46.1, the most since February.
Separate data showed the composite PMI climbed to 50.1 from 47.1 in May. A reading above 50 signals expansion.
The Indian rupee tumbled from its highest level in three weeks over speculation that the Reserve Bank of India intervened to prevent the currency from strengthening further, while importers bought more dollars.
The rupee remained slightly unchanged at 59.7175 per dollar by 2:27 p.m. local time. The currency has accelerated as much as 59.5337, the most since June 13. It surged 0.6 percent on Wednesday, the strongest in over six weeks. The rally was fuelled by state-run banks that bought dollars of RBI’s behalf and oil importers who sought to pay for shipments.
The rupee had earlier surged after report indicated that foreign investors purchased a net of $375.4 million worth of Indian stocks on 1st July, the most since June 12. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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