The New Zealand dollar rose to a four-month high against the ruble on concern Russia may face more sanctions over Ukraine, further denting the fragile Russian economy.
The kiwi touched a high of 31.14 rubles and was trading at 30.95 rubles at 8am in Wellington, from 30.83 rubles at 5pm on Friday. The local currency was little changed at 83.58 US cents from 83.59 cents at the New York close and 83.67 cents on Friday. US markets are closed for a Labor Day holiday today.
An escalation of fighting in Ukraine has prompted European leaders to threaten more sanctions against Russia, where the nation's economy is currently expected to grow just 0.5 percent this year, the slowest pace since a 2009 contraction. However Russian president Vladimir Putin yesterday criticised European leaders for supporting Ukraine and said talks on the conflict should include the issue of 'statehood' in eastern Ukraine, suggesting he is unlikely to back down.
"Tensions seem to be on the rise again in the Ukraine, after what Western officials called a Russian invasion in everything but name last week," Bank of New Zealand currency strategist Raiko Shareef said in a note. "Investors are braced for a fresh round of sanctions."
In New Zealand today, traders will be eyeing second quarter terms of trade data, scheduled for release at 10:45am. The trade data is expected to weaken, reflecting the impact of lower dairy prices.
