UPDATE 1-Rouble steadies after second drone strike on Moscow financial district – Yahoo Finance

(Updates at 1447 GMT, adds Locko-Invest comment)

By Alexander Marrow

Aug 1 (Reuters) – The Russian rouble weakened past 92 against the dollar on Tuesday, hampered by geopolitics after a second drone strike in three days at the heart of Moscow’s financial district and as oil prices ticked lower.

By 1447 GMT, the rouble was 0.7% weaker against the dollar at 92.20. It hit a more than three-week low close to 93 in the previous session.

It had lost 0.2% to trade at 100.99 versus the euro and had shed 0.2% against the yuan to 12.83 .

A high-rise building in Moscow’s business district that houses three Russian government ministries was struck by a drone for the second time in three days on Tuesday, in what Russia called an attempted Ukrainian “terrorist attack”.

Economic sanctions have been the biggest headache for Russia’s business elite since the start of the war in Ukraine, but the two drone strikes in Moskva Citi are forcing companies to think about their employees’ safety.

“The main influence on the rouble is financial flows,” said Dmitry Polevoy, head of investment at Locko-Invest.

He said that includes transactions by individuals and brokers, foreign currency debt repayments, and “the real structural outflow of capital, linked with geopolitical and domestic political risks”.

Brent crude oil, a global benchmark for Russia’s main export, was down 0.8% at $84.73 a barrel. It hit a 3-1/2 month high in the previous session.

The rouble often falls sharply after the passing of favourable month-end tax payments, which were due for July last Friday. The currency has proved more resilient than usual this week, said Alor Broker’s Alexei Antonov, a promising result.

“We do not exclude that this week the (dollar-rouble) pair will again attempt to gain a foothold below 90,” Antonov said. “But we are not counting on strong rouble growth.”

Russian stock indexes were higher, with the rouble-based MOEX Russian index up 0.9% to 3,101.3 points, its highest since Russia invaded Ukraine in February 2022.

Corporate earnings and some large companies announcing the resumption of dividend payments in June and July has supported the index, but it remains well below the record highs above 4,000 points hit in late 2021, stung by geopolitics.

The dollar-denominated RTS index was up 0.2% to 1,059.7 points, earlier clipping a two-month high. (Reporting by Alexander Marrow, editing by Ed Osmond and Gareth Jones)