Russian rouble steady, market eyes government bonds auctions
MOSCOW, Oct 31 (Reuters) - Russia's rouble held steady onWednesday as the impact of the globally stronger dollar wasoffset by rising risk appetite and higher oil prices before thefinance ministry's weekly auction of government bonds.
At 0747 GMT, the rouble was little changed at 65.57 againstthe dollar and 74.40 versus the euro.
The rouble showed a muted reaction to the U.S. dollar'sadvance to 16-month highs against six other major currencies,boosted by the strength of the U.S. economy. "Overall, we attribute the general emerging markets forexresilience against rising dollar index, and generally increasedsentiment volatility, to the widening global carry trade,"analysts at VTB Capital said in a note.
The Russian central bank's key rate is 7.5 percent, higherthan rates in developed economies. That supports the roublethrough carry trades, where investors borrow dollars cheaply andbuy into high-yielding rouble assets.
The rouble also gained support from higher oil prices. Brentcrude oil , a global benchmark for Russia's main export,was up 1.23 percent at $76.84 a barrel.
The market awaits two auctions of treasury bonds, known asOFZ, later in the day. The auctions, which since August havebeen either cancelled or seen poor demand amid threats of moreU.S. sanctions, are a gauge of market sentiment. Russian stock indexes climbed higher.
The dollar-denominated RTS index was up 1.1 percentto 1,117.92 points. The rouble-based MOEX Russian index gained 1.2 percent to 2,326.84 points.
The MOEX is expected to trade in a range of 2,300-2,350thanks to the stabilisation in oil prices and a recovery of riskappetite globally, Mikhail Poddubsky, an analyst atPromsvyazbank, said in a note.
For Russian equities guide see For Russian treasury bonds see ($1 = 65.5800 roubles)
(Reporting by Polina Nikolskaya, editing by Andrey Ostroukh,Larry King)
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