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Stronger dollar, oil price dip weigh on rouble

MOSCOW, Nov 12 (Reuters) - The rouble fell more than half a percent against the dollar on Friday as the greenback surged and prices for oil, Russia's main export, dropped by $2 a barrel. The rouble's weakness mirrors similar moves across the emerging world -- stocks, bonds and currencies in riskier markets were hit by the spike in risk aversion caused by fears over the debt-laden euro zone periphery. Crude prices were down 1.8 percent on Friday to below $87 a barrel, as investors rushed to unwind commodity positions The rouble dropped 0.7 percent against the dollar by 0810 GMT, trading at 30.78. The dollar index which tracks the greenback's moves against a basket of major currencies, was at a five-week high. "Dollar-rouble is bid this morning as the dollar index is bid and is looking to to move higher today," Tradition Analytics told clients in a note. Crude prices are below the $88 per barrel mark, it noted adding that dollar gains were again the primary culprit. "This is likely to keep rouble on the backfoot today," Tradition added. As a result of the dollar's considerable firming, the rouble also weakened against the dollar-dominated dollar-euro basket, which the central bank uses for tracking exchange rates. The rouble lost 9 kopecks on the day, falling just over 0.5 percent to 36.77 against the basket. "Today, the basket may go higher because of negative external factors, but no extremes are likely," said a dealer at a Western bank in Moscow. High crude prices mean non-residents are unlikely to start closing positions, the dealer said, adding: "It's possible that only local players will decide to fix their profits." Against the euro, which slid to a six-week low versus the dollar, the rouble managed to extend its recent gains, firming to its strongest since mid-October at 41.85. Many analysts see the rouble's correction as temporary, citing high crude prices and its underperformance relative to other commodity currencies. Russia is on track to record economic growth (GDP) of around 4 percent this year, recovering from the 7.9 percent slump recorded last year. Additional support may also come from the monthly tax payments period, starting next week, when exporters will increase their forex sales to accumulate roubles. "What happens to the dollar-euro and the effect on the price of oil are still key drivers but the improving fiscal, budget and macro picture all point to a stronger rouble," Chris Weafer, chief strategist at Uralsib, wrote in a note to clients. (Reporting by Vladimir Abramov and Lidia Kelly; Writing by Lidia Kelly, editing by Sujata Rao) Keywords: RUSSIA ROUBLE/ (lidia.kelly@thomsonreuters.com; +7 495 775 1242) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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