MOSCOW, Jan 28 (Reuters) – The Russian rouble pared gains to weaken on Friday in another volatile session but held onto most of the previous session's hefty gains as Moscow sought to ease fears over the Ukrainecrisis.
President Vladimir Putin said on Friday the United States and NATO had not addressed Russia's main security demands in their standoff over Ukraine but that Moscow was ready to keep talking, while Russia reiterated that it does not want war over Ukraine. read more
Russia's more conciliatory tone had soothed investors' concerns earlier in the session, but by 1555 GMT, it was 0.2% weaker against the dollar at 78.14 , edging away from a session best of 77.37.
Sberbank CIB analysts said the rouble's sharp gains on Thursday, when it jumped over 2%, could see it correct back to around 78.4 versus the greenback going into the weekend, when demand for foreign currency tends to be elevated.
The rouble had lost 0.3% to trade at 87.23 versus the euro , also reversing course.
"Headlines over the last two days have suggested an improvement in the geopolitical back-and-forth, but risk remains high and the global backdrop also fails to inspire as the Fed turns hawkish," said BCS Global Markets. "Any gains will likely come with caution, especially at the close of the week."
Ukrainian President Volodymyr Zelenskiy said he could not rule out a further escalation of tensions with Russia but he criticised what he said was too much "panic" weighing on the economy. read more
The West has threatened sanctions should Russia attack Ukraine. Moscow has repeatedly denied planning an invasion. read more
U.S. Federal Reserve chair Jerome Powell unleashed bets on five or more hikes this year after he left the door open on Wednesday to raising rates faster than in previous cycles, supporting the dollar globally. read more
Yields on Russia's 10-year OFZ bond yields dropped to their lowest since Monday of 9.44%, before edging higher, but well down from their highest since early 2016 of 9.86% hit this week. Yields move inversely to prices.
Brent crude oil , a global benchmark for Russia's main export, was up 1.5% at $90.69 a barrel, helping Russian stock indexes continue their rebound after a huge sell-off on Monday.
The dollar-denominated RTS index (.IRTS) was up 0.5% to 1,407.0 points. The rouble-based MOEX Russian index (.IMOEX) was 1% higher at 3,488.6 points, earlier touching a 10-day high of 3,534.40 points.
The central bank does not expect the recent volatility to hit Russian banks' capitals hard, as a record $31 billion of profit the sector made last year would absorb the losses. read more
($1 = 77.6100 roubles)
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