Rouble Bounces Back Amid Sanction Threats and Oil Price Surge

The Russian rouble climbed against the dollar on Thursday, reclaiming some losses after U.S. President Donald Trump's recent sanction threats concerning Ukraine. It rose by 0.6% at 1115 GMT to 80.55 to the dollar, nearing the critical 80 mark it had crossed in late July, as revealed by LSEG data.

According to analysts from the Bank of Saint Petersburg, the currency market appears to have incorporated the sanctions aspect into its pricing. From July 24 to July 30, the rouble had fallen 4.3% to 81.9 per U.S. dollar due to a central bank rate cut and Trump's threats, but has since begun rebounding.

Traders disclosed, under anonymity, that higher oil prices and increased forex sales by Russian exporters have fueled currency sales, addressing short-term speculative currency needs. Regular forex sales by exporters, central bank currency actions, and weak imports further supported the rouble's strength.

Despite the recent recovery, many analysts consider the rouble overvalued and forecast a gradual weakening towards year-end. Notably, against the Chinese yuan, Russia's most traded foreign currency, the rouble appreciated by 0.5% to 11.14.

(With inputs from agencies.)