EMERGING MARKETS-Oil rally lifts Russian markets, currencies aided by weaker dollar

  • Reuters
  • Stock Market News
EMERGING MARKETS-Oil rally lifts Russian markets, currencies aided by weaker dollar
Credit: © Reuters.

* Russia FX, stocks jump as oil prices climb

* Turkish lira weakens on U.S., EU sanctions threat

* Hungary's forint steady ahead of c.bank meet

By Shashank Nayar

Dec 14 (Reuters) - Russian stocks hit new record highs on Monday, supported by rising oil prices, while the rouble held near its mid-August peak as the dollar weakened broadly ahead of a U.S. Federal Reserve meeting this week.

The rouble RUBUSD=R gained 0.4% to trade at 72.99 per dollar, while Moscow stocks .IMOEX jumped almost 1% as oil prices climbed, pushing Brent LCOc1 back above $50 a barrel, buoyed by hopes that a rollout of coronavirus vaccines will lift global fuel demand. O/R

The first shipments of vaccines were speeding across the United States as part of a mission to inoculate more than 100 million people by the end of March. is definitely growing optimism that global economies will begin recovering from next year as more positive vaccine news flows," said Piotr Matys, FX strategist at Rabobank.

"But there is also the harsh reality that most emerging currencies will struggle in the near-term as virus cases still continue to rise."

The South African rand ZAR= firmed 0.6% ahead of an address by President Cyril Ramaphosa on the government's response to the pandemic, while oil-exporting Mexico's peso MXN= strengthened 0.5%. emerging market currencies got a boost as the dollar traded near a 2 1/2-year low against major peers ahead of a Fed meeting ending on Wednesday where policymakers are expected to increase purchases of longer-dated Treasuries to contain a rise in yields. FRX/

Still, Turkey's lira ZAR= weakened 0.7% as the threat of U.S. and EU sanctions coupled with worries around record coronavirus-related deaths offset data that showed a 10.2% jump in the country's industrial production in October. Hungarian forint EURHUF= held near a one-month high against the euro ahead of a central bank meeting on Tuesday where it is likely to leave interest rates unchanged, but recent declines in inflation may allow it to ease policy early next year. Polish zloty EURPLN= also firmed as the arch-conservative United Poland party decided on Saturday to remain in government despite its opposition to a European Union budget deal, meaning the ruling coalition will keep its majority. currencies rallied last week as EU leaders unblocked a 1.8 trillion euro financial package to help the economy recover from the pandemic-induced recession after reaching a compromise with Poland and Hungary.

For GRAPHIC on emerging market FX performance in 2020, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2020, see https://tmsnrt.rs/2OusNdX

For TOP NEWS across emerging markets CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB

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