Russia's Ruble Edges Higher on Oil Price Rise, Tax Period Support

A board showing currency exchange rates is on display in central Moscow.

Russia's ruble edged higher on Friday, helped by a modest rise in oil prices and the end-of-month tax period, but traders were likely to remain cautious before an upcoming holiday weekend.

At 08:05 GMT, the ruble was about 0.3 percent stronger against the dollar at 61.70 and gained 0.3 percent to trade at 70.02 versus the euro.

Brent crude oil was trading 0.4 percent higher on Friday at more than $60 a barrel, halting a two-day drop. Oil is one of Russia's chief exports and hence a crucial driver for all Russian assets.

Analysts said the ruble's trajectory for the rest of the session was likely to be determined by oil, forex sales before large ruble-denominated taxes due next week and news out of Ukraine, where the market hopes a fragile cease-fire will hold.

Russia celebrates the Defender of the Fatherland Day public holiday on Monday, meaning traders could be exposed to greater losses over the three-day weekend if they end the session holding long positions.

The ruble has gained about 2 percent against the dollar this week, largely boosted by oil, which hit a two-month high on Tuesday before falling back somewhat.

In Ukraine, fighting was still raging between pro-Russian rebels and government forces on Thursday, despite European efforts to resurrect a ceasefire agreed after diplomacy involving Ukraine, Russia, France and Germany.

Added to oil prices, the fighting is likely to be a further cause of volatility on Russian markets.

Shares were broadly higher on Friday after losing ground a day earlier. The dollar-denominated RTS index was up 1.3 percent to 918 points, while its ruble-based peer MICEX traded less than 0.1 percent higher at 1,797 points.

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