Bloomberg News

Ruble Weakens Third Day Versus Dollar as Oil Declines on Economy

July 06, 2012

The ruble weakened for a third day as oil, Russia’s biggest export earner, retreated and concern deepened that Europe’s economy is struggling.

The Russian currency depreciated 0.9 percent to 32.83 per dollar by the close in Moscow, extending this week’s losses to 1.2 percent. The ruble weakened against the euro for the first time in six days, easing 0.3 percent to 40.42. The Russian currency dropped 0.6 percent to 36.2455 against the central bank’s target dollar-euro basket.

Crude oil fell 3.1 percent to $84.53 a barrel in New York, while Spanish 10-year bond yields climbed above 7 percent. European Central Bank President Mario Draghi said yesterday “heightened uncertainty” was weighing on confidence, pushing the ECB to cut interest rates to a record low. U.S. payrolls increased by 80,000 last month, trailing the median estimate for a gain of 100,000 jobs. The jobless rate held at 8.2 percent, the Labor Department report showed.

“Optimism is gradually waning” that Europe can shore up its economy, Vladimir Tikhomirov, an analyst at Otkritie Capital in Moscow, wrote in an e-mailed research note today. The currency may trade between 36.20 rubles and 36.60 rubles against the basket next week, he said.

The International Monetary Fund will reduce its estimate for global growth this year on weakness in investment, jobs and manufacturing in Europe, the U.S., Brazil, India and China, Managing Director Christine Lagarde said in Tokyo today.

Investors increased bets on the currency weakening, with non-deliverable forwards showing the ruble at 33.3645 per dollar in three months, compared with investor expectations of 33.0452 per dollar yesterday.

To contact the reporter on this story: Ksenia Galouchko in Moscow at

To contact the editor responsible for this story: Gavin Serkin at

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