Russian rouble hits 3-week low vs euro in early trade

The Russian rouble slid to a three-week low against the euro in early Moscow trade on Friday and edged lower against the dollar, continuing a general weakening trend as the market anticipated measures that may curb the currency's recent strength. At 0756 GMT, the rouble had lost 1% to trade at 62.38 versus the euro, earlier sinking to its weakest point since July 8 of 62.55745.

The Russian rouble slid to a three-week low against the euro in early Moscow trade on Friday and edged lower against the dollar, continuing a general weakening trend as the market anticipated measures that may curb the currency's recent strength.

At 0756 GMT, the rouble had lost 1% to trade at 62.38 versus the euro, earlier sinking to its weakest point since July 8 of 62.55745. It was 0.6% weaker against the dollar at 61.17 after touching 63.31 in early trade, its weakest mark since July 11.

The rouble has been showing negative dynamics in recent sessions amid diminishing support from exporting firms, said Banki.ru analyst Bogdan Zvarich, after the ending on Thursday of an income-tax payment period that usually sees them convert foreign currency revenues. "Today this trend may continue, although no significant fundamental reasons for the rouble's weakening are being observed," Zvarich said.

The market is anticipating news that the government will soon tweak and reinstate Russia's budget rule that diverts excess oil revenues into its rainy-day fund with a new cut-off price. The government has also hinted at currency interventions that may curb the rouble's strengthening, an issue that has concerned officials because the strong currency dents income from commodity exports.

"The tax period has ended and the domestic currency is now at the mercy of possible interventions by the finance ministry," said Otkritie Research in a note. The rouble is the world's strongest-performing currency so far this year, boosted by measures to shield Russia's financial system from Western sanctions imposed after Moscow sent troops into Ukraine on Feb. 24. These include restrictions on Russian households withdrawing foreign currency savings.

"Russian stocks are likely to follow European shares higher today, supported by higher oil prices," said Alfa Bank in a note. Brent crude oil, a global benchmark for Russia's main export, was up 1.5% at $108.7 a barrel.

Russian stock indexes were mixed. The dollar-denominated RTS index was down 0.4% at 1,133.8 points. The rouble-based MOEX Russian index was 0.5% higher at 2,200.1 points.

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