- Rouble sinks to 7-month low of 75.9225 vs dollar
- Russian currency hits two-month low 85.5625 vs euro
- Tanking oil prices, geopolitical risks hit Russian assets
- New COVID variant also harming risk trade
MOSCOW, Nov 26 (Reuters) - The rouble dropped over 1% against the U.S. dollar on Friday, cascading to a more than seven-month low as oil prices dived and geopolitical concerns that have buffeted Russian assets all week remained on investors' minds.
A global increase in risk aversion related to the detection of a new coronavirus variant also put pressure on the Russian currency.
After scaling to its strongest level since mid-2020 of 69.21 on Oct. 26, the unit has lost more than 8% of its value against the dollar in a month amid Western concerns over possible Russian military intervention in Ukraine.
By 0855 GMT, the rouble was down 1.4% against the dollar at 75.72 , earlier hitting 75.92, its weakest since April 22.
"Geopolitical fears have squeezed investors out of Russia funds at a pace unseen since mid-March 2020, while the surge in COVID in the area makes it a perfect storm for Russian stocks, bonds and other financial assets," BCS Global Markets said.
Against the euro, the rouble shed 1.7% to trade at 85.18 , earlier passing the 85.5 mark for the first time since late September.
Russia has dismissed concerns over possible military intervention in Ukraine and complained about increasing activity in the region by the NATO military alliance.
The rouble's volatility and deteriorating external backdrop may see the central bank suspend foreign currency purchases as part of the budget rule, said Dmitry Polevoy, head of investment at Locko-Invest.
The central bank, which did not immediately respond to a request for comment on FX, is currently buying around $342 million a day.
Promsvyazbank analysts suggested in a note that the currency would end the day trading nearer to 76 versus the greenback.
But Otkritie Bank analysts said it looked oversold near 75 against the dollar.
Brent crude oil , a global benchmark for Russia's main export, was down 4.2% at $78.80 a barrel, pushing Russian stock indexes towards their lowest level since August.
On the stock market, the dollar-denominated RTS index was down 3.6% at 1,606.6 points. The rouble-based MOEX Russian index was 2.2% lower at 3,859.5 points.
($1 = 75.6820 roubles)
Reporting by Alexander Marrow and Andrey Ostroukh; Editing by Kim Coghill, John Stonestreet and Sherry Jacob-Phillips
Source: Reuters