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Russian rouble falls after North Korean nuclear test

The Russian rouble weakened on Monday on the back of geopolitical tensions between the United States and North Korea after Pyongyang’s sixth and most powerful nuclear test.

North Korea said Sunday’s test was of an advanced hydrogen bomb for a long-range missile, marking a dramatic escalation of its stand-off with the United States and its allies.

The increased tensions drove investors away from more volatile, risky assets, analysts said.

At 0830 GMT, the rouble was 0.6 percent weaker against the dollar at 57.85 and had lost 0.9 percent to trade at 68.91 versus the euro.

The rouble also came under pressure from falling oil prices after North Korea’s nuclear test triggered a flight of investors away from crude markets and into gold futures, which are seen as a safe haven.

Brent crude oil, a global benchmark for Russia’s main export, was down 1.3 percent at $52.06 a barrel.

U.S. markets were closed for the Labour Day holiday on Monday, reducing market liquidity.

“The balance of power in the market has returned to the ‘tug-of-war’ between expectations of monetary policy easing from the Russian Central Bank … and geopolitical news,” analysts at Rosbank said in a note.

Russian share indexes also fell.

The dollar-denominated RTS index was down 0.7 percent to 1,093 points, while the rouble-based MICEX was 0.3 percent lower at 2,006 points.


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