Ruble ends record rising run
MOSCOW: The ruble ended its longest-ever strengthening streak against the central bank's target basket as companies sold the currency amid speculation it has gained too much before the Russian holiday break.
The currency snapped a 10-day advance against the dollar-euro basket, weakening 0.4 percent to 34.7554 versus the mechanism used by Bank Rossii since 2005 to limit swings in the ruble that disadvantage exporters.
It dropped for the first day in seven against the dollar, ending the longest rising streak to the greenback since July, and snapped seven days of gains against the euro.
The ruble has rebounded over the past two months as oil prices surged 10 percent and the central bank indicated it may raise Russia's key interest rates, bolstering the appeal of ruble-denominated assets. Traders have become more bullish on the ruble in December, with the currency's one-week risk-reversal rate -the premium of put options over calls --dropping to 0.75 percent, from 1.25 percent Nov. 30.
The ruble's record run means that "technically it looks overbought now and a short-term correction is on the cards," Denis Korshilov, head of foreign-exchange trading in Moscow at Citigroup Inc., said by e-mail today. Large Russian banks are "closing some ruble longs ahead of the long holidays," he added, referring to the positions investors place on securities they expect to appreciate.
The ruble was 0.7 percent weaker at 30.46 per dollar by 1:19 p.m. in Moscow, and slid 0.2 percent to 40.01 per euro. The basket rate is calculated by multiplying the dollar-ruble rate by 0.55, the euro-ruble rate by 0.45, then adding them together. - PB News