Russian rouble moves away from 6-month low, up 1pc ahead of Fe

MOSCOW: The Russian rouble edged up against the US dollar on Wednesday, moving away from six-month lows as investors awaited the minutes of the Federal Reserve's July meeting for signs of possible future US interest rate cuts.

Expectations of lower rates in the United States usually support emerging-market assets, including the Russian rouble and bonds.

The Russian currency firmed 1% to 65.89 against the dollar as of 1115 GMT, moving away from the six-month low of 67.11 it hit on Monday. Versus the euro, the rouble was 0.9% stronger at 73.20.

The US Federal Reserve is due on Wednesday to release minutes from its meeting last month, while Fed Chairman Jerome Powell will speak on Friday, when he is expected to give guidance on the possibility of a rate cut in September.

"The Russian market can be expected to consolidate yesterday's gains as investors move to the sidelines ahead of Friday's Jackson Hole symposium and comments from the Fed," Alfa Bank said in a note, referring to Powell's keynote speech.

The rouble has also been boosted by a rise in the oil price to above $60 a barrel and also by upcoming month-end tax payments that prompt export-focused companies to convert foreign currency revenue to meet local liabilities.

The Russian currency could also be buttressed by the finance ministry's weekly auction of OFZ treasury bonds on Wednesday.

The ministry said it had sold 20 billion roubles ($303.26 million) worth of OFZ bonds maturing in 2030 in the first of two auctions, while demand reached 46.5 billion roubles.

Demand for these bonds usually serves as a gauge for market sentiment toward Russian assets.

VTB Capital said in a note that the rouble was faring slightly better than other emerging market currencies because of non-residents' purchases of OFZs and foreign currency sales by exporters ahead of tax payments.

Russian stock indexes were mixed on Wednesday.

The dollar-denominated RTS index was up 0.9% at 1,276 points, while the rouble-based MOEX Russian index was flat at 2,670 points.