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The Russian rouble gave up early gains in a volatile start to Thursday's session, weighed down by expectations the government may try to limit the currency's strengthening and the end of a favourable tax period.
Thursday marks the deadline for income tax payments that support the rouble, which could see exporters cut back on selling foreign currency earnings, although Russia's strong current account surplus may protect the currency from significant weakening.
At 0834 GMT, the rouble was 0.1% weaker against the dollar at 59.94 and had lost 0.7% to trade at 61.16 versus the euro.
The rouble may trade in the 58-60 range against the greenback on Thursday, Promsvyazbank analysts said, after the U.S. Federal Reserve raised the benchmark rate by an as-expected 75 basis points on Wednesday.
But any strengthening of the rouble could be tempered by expectations that the government will soon tweak and reinstate Russia's budget rule that diverts excess oil revenues into its rainy-day fund with a new cut-off price, Promsvyazbank added.
Russia's federal statistics service published data late on Wednesday that painted a gloomy picture about industrial output, real disposable incomes and retail sales, all down in year-on-year terms, although the unemployment rate stayed at a record low.
The rouble has become the world's strongest-performing currency so far this year, boosted by measures to shield Russia's financial system from Western sanctions imposed after Moscow sent troops into Ukraine on Feb. 24. These include restrictions on Russian households withdrawing foreign currency savings.
Stronger oil prices, which hit their highest since early July, could help the rouble in its quest to win back more of the hefty losses sustained on Tuesday, said Banki.ru analyst Bogdan Zvarich.
Brent crude, a global benchmark for Russia's main export, was up 1.2% at $107.9 a barrel.
"There are no fundamental reasons for the significant weakening of the rouble - demand for foreign currency from importers and the population is still unable to outweigh the supply of foreign currency from exporters," Zvarich said.
Russian stock indexes were down.
The dollar-denominated RTS index was down 0.9% to 1,144.1 points. The rouble-based MOEX Russian index was 0.9% lower at 2,177.2 points. (Reporting by Reuters;)