MOSCOW- The Russian rouble rallied against the euro to its strongest since mid-August on Thursday and firmed versus the dollar after falling to a more than one-week low in the previous session following hawkish signals from the U.S. Federal Reserve.
The rouble strengthened for most of Wednesday after Russian President Vladimir Putin and U.S. President Joe Biden held their first summit at which they agreed to begin cybersecurity and arms control talks.
They also agreed to send their ambassadors back to each other's capitals even though the meeting in Geneva highlighted discord on issues such as human rights and Ukraine.
But the rouble took a hit after the U.S. Federal Reserve surprised investors by signalling it might raise interest rates at a much faster pace than assumed, sending the dollar sharply higher.
At 1438 GMT, the rouble gained 0.5% to 72.20 against the dollar, holding clear of the 72.71 mark touched on Wednesday, its weakest since June 8.
Versus the euro, the rouble firmed 1.1% to 86.10, a level last seen on Aug. 12.
"While major issues still remain, the summit offers hope that tensions have eased and the threat of new sanctions has been reduced," BCS Global Markets said in a note.
Brent crude oil, a global benchmark for Russia's main export, was down 0.4% at $74.10 a barrel but hovered near multi-year highs, buoyed by falling U.S. crude inventories which limited the impact of a stronger U.S. dollar.
Russian stock indexes were lower.
The dollar-denominated RTS index was down 0.6% to 1,669.6 points. The rouble-based MOEX Russian index slid 0.1% to 3,824.9 points, trading near an all-time high of 3,865.20 it touched on Tuesday.
(Reporting by Alexander Marrow and Andrey Ostroukh; Editing by Timothy Heritage and Barbara Lewis) ((firstname.lastname@example.org))