The Russia’s ruble ended a five-day losing streak after a certain section of the market viewed the European Union and U.S. sanctions as less harsh than expected.
The ruble accelerated 0.5 percent to trade at 35.6245 per dollar at 11:50 a.m. local time. This reduced its drop this month to 4.6 percent, the biggest monthly decline since January. The yield on bonds that mature on February 2027 fell nine basis points to steady at 9.38 percent.
The ruble also rallied 0.5 percent to 47.7590 per euro and also increased by the same margin against the central bank’s benchmark pool of euros and dollars to 41.0881.
“The markets were preparing for a much worse-than-expected outcome in the sanctions war,” said Luis Costa, a strategist at Citigroup Inc. in London, told Bloomberg.
European Union countries imposed new sanctions on Russia on Tuesday that block state-backed lenders from selling bonds or shares in Europe, curb the exportation of machinery and technology for modernizing the oil industry and banning exporting equipment with military applications. The U.S. imposed sanctions on three Russian banks such as VTB Group and a government-owned shipbuilding company.
The European Union will name three organizations along with eight Putin’s allies who are targeted by the sanctions.
Meanwhile, the euro fell to its lowest level versus the dollar after a report showed that consumer prices in Spain plunged 0.3 percent in July from a year ago. The euro plunged to $1.3395, its weakest level since November 2013, before accelerating to $1.3400, a drop of 0.1 percent on the session. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at email@example.com