Russian rouble moves towards 89 vs dollar as market follows geopolitical news

The Russian rouble made a renewed attempt to push towards the 89 mark against the U.S. dollar on Thursday, continuing to trade in a relatively narrow band as traders closely follow geopolitical developments.

The Russian rouble made a renewed attempt to push towards the 89 mark against the U.S. dollar on Thursday, continuing to trade in a relatively narrow band as traders closely follow geopolitical developments. The rouble is up against the dollar this year, mostly thanks to expectations of improved relations between Moscow and Washington that could produce some kind of conflict resolution in Ukraine and a possible easing of sanctions against Russia.

By 0950 GMT, the rouble was up 1.2% at 89.30 to the dollar in over-the-counter market trade. Morning gains have evaporated in every session this week and the rouble has depreciated for six sessions in a row since reaching a more than six-month high in late February. Against the yuan, the most traded foreign currency in Russia, the rouble was down around 0.6% to 12.30.

Without accounting for changes in the geopolitical situation, the rouble's fair value against the dollar remains close to triple digits, Renaissance Capital analysts Oleg Kuzmin and Andrei Melashchenko said in a note. "The potential for a stronger exchange rate forming depends on the degree of improvement in the situation with geopolitics and sanctions," they said.

Any geopolitical positivity can cause the rouble to rise by another 5%-10%, said Dmitry Polevoy, head of investment at Astra Asset Management, expecting the rouble to return to the 95-100 range in the second half of the year. Brent crude oil, a global benchmark for Russia's main export, was up 0.4% at $69.59 a barrel, after falling to the lowest since late 2021 in the previous session.

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