Oct. 28 (Bloomberg) -- The ruble strengthened a second day against the dollar, extending its biggest weekly gain since February 2009, after a new European debt deal boosted investor appetite for riskier emerging-market assets.
The Russian currency climbed 4.5 percent against the dollar this week and gained 0.9 percent to trade at 29.695 per dollar at the 7 p.m. close in Moscow. The ruble was 0.6 percent stronger at 42.1425 versus the euro, leaving it up 0.7 percent at 35.2964 against the central bank’s target dollar-euro basket.
Markets rallied yesterday after leaders of the European Union, Russia’s largest trading partner, agreed on a crisis- fighting package intended to shield the euro area. Urals crude oil, Russia’s main export blend, jumped 2.7 percent to $111.65 a barrel on Oct. 27 before retreating 0.6 percent today.
“The ruble’s well positioned to bounce back, if you remove both the global financial crisis risks and the global recession risks,” Benoit Anne, the London-based head of global emerging- markets strategy at Societe Generale SA, said by e-mail. “The upside risks are now much more substantial. In addition to the EU plan, we are starting to see an improvement in macro data too, which could pave the way for a major rally in risky assets.”
The value of goods and services produced in the U.S. surpassed its pre-recession level after 15 quarters, a Commerce Department report showed yesterday. Adjusting for inflation, U.S. gross domestic product climbed to $13.35 trillion last quarter, topping the $13.33 trillion peak reached in the last three months of 2007.
Investors pared bets the ruble will weaken further, with non-deliverable forwards showing the currency at 30.1375 per dollar in three months, compared with 31.58 at the end of last week.
Russia’s $3.5 billion of debt due 2020 climbed for a sixth day, pushing the yield down four basis points, or 0.04 percentage point, to 4.344 percent. The yield has fallen 30 basis points this week.
Domestic ruble notes due August 2016 fell, driving the yield up seven basis points to 7.78 percent.
--Editors: Alex Nicholson, Wojciech Moskwa
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