Russian rouble weakens

MOSCOW, Jan 21 (Reuters): The Russian rouble fell on Wednesday, ignoring a firmer oil price, as markets reacted to a surge in fighting in eastern Ukraine and speculation that Russia may soon cut interest rates.
At 0815 GMT the rouble was down 1.0 per cent against the dollar to trade at 65.86 and 1.1 per cent weaker versus the euro at 76.17.
The slide came despite a firming of the oil price, typically the most important driver of Russian assets, with Brent up over a per cent to $48.50.
Fighting has intensified in eastern Ukraine between government forces and separatist rebels backed by Russia, complicating peace efforts and diminishing the prospect that the West may soften its sanctions against Russia.
On Tuesday, Ukraine said its forces had also come under attack from regular Russian troops. Russia denied the statement.
However, the influence of Ukrainian developments on Russian markets has declined, ING analyst Dmitry Polevoy said in a note.
"Despite the rising geopolitical tension in Ukraine, the rouble continues closely to follow oil," he said, referring to Tuesday's 0.3 per cent decline in the rouble against the dollar.