Ruble: Moves away from 15-month low, strengthens 1% against the dollar

The ruble gained ground on Thursday, rising 1% against the dollar and moving away from the nearly 15-month low of the previous session, as the escalation of tensions over Ukraine continued to dictate activity in volatile Russian markets.

The ruble fell to its lowest level since November 2020 on Wednesday, before reducing some of its losses, as the United States said it had set out a diplomatic course to address Russia’s sweeping demands in Eastern Europe.

The ruble was up 1% against the dollar at 78.62, recovering all Wednesday losses.

It had fallen to 80.4125 against the dollar in the previous session. Against the euro, it rises 1.5% to 88.05.

The impetus for the rise may have been Belarus, which has announced that Russian troops will leave its territory as soon as military exercises are over, which is scheduled for February.

“There has already been a wave of dollar sales since the morning, but Belarus’ announcement has accelerated the process,” said a dealer at a major Russian bank.

The ruble outperformed other emerging market currencies, which fell against the stronger dollar, which strengthened as Fed Chairman Jerome Powell surprised investors by leaving open the possibility of higher and faster-than-expected rate hikes.

“We find that the ruble now appears to be clearly oversold, which despite the negative impact, could affect the rapid recovery of the Russian currency,” said analysts at Promsvyazbank.

Volatility has plagued Russian markets in recent weeks amid Western fears that Russia would invade neighboring Ukraine, something Moscow has repeatedly denied.

The West has threatened sanctions with far-reaching economic implications if Russia invades.

British Prime Minister Boyce Jenson has said he is discussing banning Russia from the global SWIFT payment system with the United States, one of the toughest measures ever considered.