US Dollar pulls back from 15-month high vs rouble

The US Dollar rose against the rouble on Monday, although it was off the 15-month high hit earlier in the session, while the Japanese yen gained modestly against the greenback following comments from the country’s top currency diplomat.

Senior Russian officials rallied around President Vladimir Putin on Monday while state media said authorities were still investigating mercenary leader Yevgeny Prigozhin, whose weekend mutiny appeared to pose a major threat to the Russian leader’s 23-year-old rule.

“We had that rapid escalation and just as fast de-escalation and it goes to show you this was a serious a threat for Putin to agree to terms to make a deal with Prigozhin,” said Edward Moya, senior market analyst at OANDA in New York.

“It really looks like the focus will probably shift back until we have a clearer understanding of that to the global growth slowdown we are seeing.”

The Russian rouble weakened 0.90% versus the greenback at 84.40 per dollar after hitting its weakest level since March 2022.

The dollar was softer against the yen, after Vice Finance Minister for International Affairs Masato Kanda said Japan was not ruling out any options in possible responses to excessive currency moves.

The Japanese yen strengthened 0.11% versus the greenback at 143.52 per dollar. The Bank of Japan last intervened in the yen when it traded around 145 per dollar.

“Whenever you have intervened and you have seen it work a little bit and then the price comes back to where you intervened in the past it’s like oh, start jawboning again,” said Moya.

The Japanese currency has come under pressure as the Bank of Japan has maintained its soft monetary policy, while central banks around the globe have embarked on a rapid path of hiking interest rates to combat stubbornly high inflation.

The dollar index fell 0.01% at 102.730, edging up on a safe-haven bid as concerns about a slowing global economy linger in the midst of aggressive tightening actions by central banks.

The euro was up 0.16% to $1.0906 ahead of remarks by European Central Bank President Christine Lagarde at the ECB Forum on Central Banking in Sintra.

Earlier data in the region showed German business morale worsened for the second consecutive month in June, indicating that Europe’s largest economy faces an uphill battle to shake off recession.

Sterling was last trading at $1.2707, down 0.03% on the day.

In Asia, the dollar rose 0.40% versus the offshore Chinese yuan to $7.2442 after hitting a 7-month high as investors braced for potentially more support measures as China returned on Monday from a holiday. Further stimulus measures from Beijing were expected to bolster China’s flagging economic recovery.