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. Last Updated: 07/27/2016

Ruble Vacillates While Traders Watch Dollar

The ruble has failed to take heart from a clutch of bullish signals, as the market is nervous about a rebound in the dollar on global markets, dealers said on Thursday.

At the end of 2004 the ruble powered to four-year highs against a softening dollar, driven up by high prices for Russia's chief export, oil, and a perception the authorities would tolerate a stronger ruble to combat inflation.

But so far this year the ruble has gyrated in a 40 kopek range. "The market is at a loss," said Alba Alliance dealer Artyom Roshchin.

This week Finance Minister Alexei Kudrin said Russia could fight price growth with a stronger ruble and Standard & Poor's awarded the country a long-awaited investment-grade rating.

Although both developments gave the ruble a brief boost, no new uptrend has been established.

On Thursday, rubles for "tomorrow" delivery on the MICEX were a touch weaker at 28 to the dollar, having been fixed at 27.9665 the previous session.

"You might have strong sentiment towards the ruble but if the dollar is in a rebound trend it's not going to pan out for you on dollar/ruble," said CSFB currency strategist Koon Chow.

"That's why we're not responding to the friendly-friendly cues that we've been getting," Chow added.

The dollar has gained more than 6 cents against the euro since hitting a record low in late December as rate- hike expectations helped offset worries about U.S. current account and budget deficits.

The Federal Reserve hiked rates to 2.5 percent Wednesday as expected and its statement cemented expectations of gradual tightening in the future.

"The mood here is for the dollar to go lower [against the ruble] but people aren't rushing to open short positions because on Friday there's U.S. payrolls data waiting for us," said Dmitry Akulov, a Raiffeisenbank dealer in Moscow.

"This could have a big influence on the euro/dollar which would be reflected in the dollar/dollar," Akulov added.